An economic analysis of natural disaster response: The 1998 ice storm and the eastern Ontario maple syrup industry

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Authors

Kidon, Jennifer L.

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University of Guelph

Abstract

This study analyses the economic effects of a natural disaster at the enterprise, industry and policy levels. An examination of the effects of the 1998 ice storm on the eastern Ontario maple syrup industry and the subsequent responses at these three levels is extended to a broader discussion of lessons to be learned for future natural disaster policies. A partial budget capital budgeting analysis was used to estimate enterprise-level losses. Partial equilibrium analysis was used to estimate aggregate industry losses. Expected losses at the enterprise- and industry-levels were compared to individual financial assistance and total government assistance expenditures, respectively, to determine if losses have been offset. The total economic impact of the 1998 ice storm on the eastern Ontario maple syrup industry is estimated to be $5.5 million (1999 dollars) and to be significantly less than government assistance to the industry. Stochastic simulations and sensitivity analyses were used at both the enterprise- and industry-levels to examine the robustness of the results. Implications and considerations for future natural disaster policy development in Canada are discussed.

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Keywords

economic effects, natural disaster, enterprise, industry, policy, ice storm, maple syrup industry

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