Economic impact assessment of natural disaster with multi-criteria decision making for interdependent infrastructures

Natural disasters, such as flood, earthquake or hurricane, can cause environmental damage, infrastructural destruction, economic disruption and result in the loss of human lives. The goal of this paper is to assess vulnerability of the interdependent sectors and to determine the impact of a disaster. As part of our investigation, we explore the inoperability input–output model (IIM) to obtain ballpark estimate of losses. IIM can quantify the effect on production level and measure ripple effect of perturbation on the interdependent system by calculating the economic loss and inoperability level. Furthermore, PROMETHEE (preference ranking organization method for enrichment evaluations) is integrated with IIM, incorporating the criteria of economic system linkages, economic losses and percentage of the inoperability. It will help to analyze the effect of disaster and rank the most vulnerable sectors—based on the defined criterion. A case study is performed in Pakistan (an Asian developing country) which was hit by floods in 2011–2012, perturbing the demand in various sectors. To analyze the perturbation level and system linkages, an interdependent input–output matrix—based on the Pakistan’s economy—is constructed. Further research analysis gives perspicacity in terms of describing criticality and sensitivity of the independent economic system. It is concluded that the agriculture and service sectors have suffered with the highest inoperability level. The results also identify significant sectors of the economy after flood strikes; these sectors can be prioritized for policymaking activities to reduce the sector-specific impact in the aftermath of a catastrophic event.