Impact of future tsunamis from the Java trench on household welfare: Merging geophysics and economics through catastrophe modelling

This paper presents the first end-to-end example of a risk model for loss of assets in households due to possible future tsunamis. Tsunamis are major worldwide disasters; large events in 2004 and 2011 have reached death counts of approximately 228,000 and 18,000, and many more injuries, across the Indian Ocean and Japan. Indonesia is among the most active tsunamigenic regions in the world and was the site of two destructive tsunamis in the past few years in Sulawesi (September 2018) and in Sunda Strait (December 2018). There is a significant need for Government to assess the generic risk to buildings, and the concrete impact on the full range of assets of households, including the ones that are key to livelihoods such as agricultural land, fishing boats, livestock and equipment. 

This study provides a step-change in tsunami risk assessment by computing explicitly the possible impact on household welfare. The baseline results showed that households in medium and heavy damaged areas saw an average asset loss of 6% and 33%, respectively, compared to those in no/light loss areas. Assuming externally validity, we then used multinomial logit to fit in Oasis bins for the vulnerability module. The study's loss calculations show that losses increase sharply, especially for events with return periods beyond 250 years. These series of computations will allow more accurate investigations of impacts on livelihoods and thus will help design mitigation strategies as well as policies to minimize suffering from tsunamis.