Demand surge following earthquakes

Demand surge is understood to be a socio-economic phenomenon where repair costs for the same damage are higher after large- versus small-scale natural disasters. It has reportedly increased monetary losses by 20 to 50%. In previous work, a model for the increased costs of reconstruction labor and materials was developed for hurricanes in the Southeast United States. The model showed that labor cost increases, rather than the material component, drove the total repair cost increases, and this finding could be extended to earthquakes. A study of past large-scale disasters suggested that there may be additional explanations for demand surge. Two such explanations specific to earthquakes are the exclusion of insurance coverage for earthquake damage and possible concurrent causation of damage from an earthquake followed by fire or tsunami. Additional research into these aspects might provide a better explanation for increased monetary losses after large- vs. small-scale earthquakes.