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Potential effects of a scenario earthquake on the economy of southern California: Small business exposure and sensitivity analysis to a magnitude 7.8 earthquake

September 16, 2008

The Multi-Hazards Demonstration Project (MHDP) is a collaboration between the U.S. Geological Survey (USGS) and various partners from the public and private sectors and academia, meant to improve Southern California's resiliency to natural hazards (Jones and others, 2007). In support of the MHDP objectives, the ShakeOut Scenario was developed. It describes a magnitude 7.8 (M7.8) earthquake along the southernmost 300 kilometers (200 miles) of the San Andreas Fault, identified by geoscientists as a plausible event that will cause moderate to strong shaking over much of the eight-county (Imperial, Kern, Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura) Southern California region. This report contains an exposure and sensitivity analysis of small businesses in terms of labor and employment statistics. Exposure is measured as the absolute counts of labor market variables anticipated to experience each level of Instrumental Intensity (a proxy measure of damage). Sensitivity is the percentage of the exposure of each business establishment size category to each Instrumental Intensity level. The analysis concerns the direct effect of the earthquake on small businesses.

The analysis is inspired by the Bureau of Labor Statistics (BLS) report that analyzed the labor market losses (exposure) of a M6.9 earthquake on the Hayward fault by overlaying geocoded labor market data on Instrumental Intensity values. The method used here is influenced by the ZIP-code-level data provided by the California Employment Development Department (CA EDD), which requires the assignment of Instrumental Intensities to ZIP codes. The ZIP-code-level labor market data includes the number of business establishments, employees, and quarterly payroll categorized by business establishment size.

Citation Information

Publication Year 2008
Title Potential effects of a scenario earthquake on the economy of southern California: Small business exposure and sensitivity analysis to a magnitude 7.8 earthquake
DOI 10.3133/ofr20081222
Authors Benson C. Sherrouse, D. J. Hester, Anne M. Wein
Publication Type Report
Publication Subtype USGS Numbered Series
Series Title Open-File Report
Series Number 2008-1222
Index ID ofr20081222
Record Source USGS Publications Warehouse
USGS Organization Rocky Mountain Geographic Science Center

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