Topic: Miller College of Business

August 23, 2010

Large scale flooding as a result of recent heavy rains in Pakistan may have caused up to $7.1 billion in damages, says a new joint study from Ball State University and the University of Tennessee.

The flooding has so far killed an estimated 1,500 people as torrential downpours have soaked Pakistan during the annual monsoon season. The floods hit first in the northwest, wiping out much of the country's infrastructure, and then the bloated rivers gushed toward the south and the east, displacing millions more people. About a fifth of Pakistani territory has been affected.

The preliminary estimate of damage is a result of a model created by Michael Hicks, director of Ball State's Center for Business and Economic Research (CBER), and Mark Burton, an economics professor at the University of Tennessee. The model also incorporates data taken from estimating damage from world flooding events from 1950 to 2010.

"As we've drafted our study, the flood event continues to unfold," Hicks said. "It will be weeks before effective damage inventories can start and months before they are complete. What the current analysis seeks to do is anticipate the aggregate monetary value of these inventories — at least to an order of magnitude — so that policymakers and policy operatives will immediately be able to prepare the way for restoration."

The model was used previously to estimate losses caused by Hurricane Katrina, which slammed into the southern United States in 2005. It also has been applied to a variety of settings in Louisiana, Mississippi, Tennessee, Indiana, Illinois and Iowa.

The study estimates structural and content damage in Pakistan to be about $4.3 billion, including $2.1 billion in losses to residential contents and $1 billion to public buildings.

Hicks estimates that Pakistan's transportation systems also were impacted severely by the rains and resulting floods, with roads estimated at $148 million and rail at $131 million, including bridges.

By Marc Ransford, Senior Communications Strategist