Assessing the economic impacts of IT service shutdown during the York flood of 2015 in the UK

Yang Xia, Dabo Guan, Albert E. Steenge, Erik Dietzenbacher, Jing Meng, David Mendoza Tinoco

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In this paper we focus on the ‘Christmas’ flood in York (UK), 2015. The case is special in the sense that little infrastructure was lost or damaged, while a single industry (IT services) was completely knocked out for a limited time. Due to these characteristics, the standard modelling techniques are no longer appropriate. An alternative option is provided by the Hypothetical Extraction Method, or HEM. However, there are restrictions in using the HEM, one being that no realistic substitutes exist for inputs from industries that were affected. In this paper we discuss these restrictions and show that the HEM performs well in the York flood case. In the empirical part of this paper we show that a three-day shutdown of the IT services caused a £3.24 m to £4.23 m loss in York, which is equivalent to 10% of the three days' average GVA (Gross Value Added) of York city. The services sector (excluding IT services) sustained the greatest loss at £0.80 m, where the business support industry which was predominantly hit. This study is the first to apply a HEM in this type of flood on a daily basis.
Original languageEnglish
Article number20180871
JournalProceedings of the Royal Society A: Mathematical, Physical and Engineering Sciences
Issue number2224
Early online date17 Apr 2019
Publication statusPublished - Apr 2019

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