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Take care when examining the economic impact of fires. GDP doesn’t tell the full story

Janine Dixon writes in The Conversation (17.1.20) about attempts to quantify the costs of this summer's destructive bushfires, reminding that GDP is well suited to many things, but not necessarily to measuring the impact of disasters.

'Estimates of the economic damage caused by the bushfires are rolling in, some of them big and some unprecedented, as is the scale of the fires themselves.

'These types of estimates will be refined and used to make – or break – the case for programs to limit the impact of similar disasters in the future. Some will be used to make a case for – or against – action on climate change.

'But it’s important they not be done using the conventional measure of gross domestic product (GDP). GDP measures everything produced in any given period.

'It is a good enough measure of material welfare when used to measure the impact of a tourist event or a new mine or factory or something like the national broadband network, but it can be misleading – sometimes grossly misleading – when used to measure the economic impact of a catastrophe or natural disaster.'

Nearly 80% of Australians affected in some way by the bushfires

Nicholas Biddle and colleagues write in The Conversation (18.2.20) about the results of a new ANU study which gauged how people were impacted by the bushfire crisis and how it changed their views on a range of subjects, from climate change to the government response.

'Last month, the Australian National University contracted with the Social Research Centre (SRC) to survey more than 3,000 Australian adults about their experiences and attitudes related to the bushfires.

'… Our research shows the vast majority of Australians were touched in some way by the fires. We asked about eight different forms of impact, from lost property to disrupted holiday plans to difficulty breathing from the smoke.

'About 14.4% of our respondents experienced direct exposure to the fires, either through their property damage or evacuations.

'… And 77.8% of our respondents reported indirect exposure to the fires, such as having a friend or family member with damaged or threatened property, having travel or holiday plans disrupted, being exposed to the physical effects of smoke or feeling anxious or worried about the fires.

'Breaking the data down by individual category, the severity of the public health challenges becomes more clear. Nearly six in 10 respondents (57%) said they were physically affected by the smoke, while 53.6% said they felt anxious or worried about the fires.'

 

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