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Using Regional Economic Models To Estimate The Costs Of Infrastructure FailuresUsing Regional Economic Models To Estimate The Costs Of Infrastructure Failures: The Cost Of A Limited Interruption In Electric Power In The Los Angeles Region

April 2005

by Professor James E. Moore II
Richard G. Little
and Sungbin Cho


We present an integrated model of losses due to infrastructure failures, and we provide an example application to interruptions in electric power. The model estimates how these losses affect the metropolitan economy. This measurement accounts for direct, indirect, and induced costs that can result from infrastructure failures. The procedure advances the information provided by transportation and activity system analysis techniques in ways that help capture the most important economic implications of infrastructure failures. Transportation network costs and origin-destination requirements are modeled endogenously and consistently. Our overall research framework enables us to express these full costs in aggregate terms at a sub-metropolitan level as well as in a distributional sense.