The economic impact of earthquakes: A global assessment of direct and indirect losses

This study examines the economic impact of earthquakes through a comparative analysis of eight major seismic events. The research evaluates both direct damages—such as the destruction of housing and infrastructure—and indirect consequences, including business interruption, supply chain disruption, and GDP contraction. Total losses per event ranged from US$8 billion (Haiti 2010) to US$510 billion (Japan 2011), with the ratio of indirect to direct losses spanning 0.42–0.60, underscoring the systemic economic consequences beyond physical destruction. Losses as a share of GDP varied dramatically, from 3% in China to 120% in Haiti, highlighting structural vulnerability in lower-income economies. On average, housing (35%) and infrastructure (25%) comprised the bulk of direct losses, while business interruption (20%), transport/logistics disruptions (12%), and spoilage (5%) accounted for other costs. High-income economies experienced elevated indirect losses due to supply chain interdependence, while low-income countries faced disproportionate economic scarring from service delays and governance gaps. These different vulnerability profiles demonstrate that post-disaster economic impacts stem not only from the magnitude of damage but also from the organizational structure of economic systems and the level of institutional capacity. Therefore, the need for more comprehensive loss accounting frameworks and integrated resilience planning that prioritize both structural safety and economic continuity is of critical importance. Earthquakes function as macroeconomic shocks whose true costs extend far beyond immediate physical destruction, particularly in a globalized economy.