Business Impacts Of The Northridge Earthquake

The Northridge earthquake of January 17, 1994 killed 57 people and injured an estimated 10,000. When all the claims are finally processed, the costs of repairing earthquake damage and providing relief to victims will probably exceed $30 billion, including $12- 15 billion in insured losses, making that event the most costly disaster in U. S. history. The number of households and businesses that suffered losses in the Northridge earthquake far exceeded the size of the victim population in other recent major disasters in the U. S., including Hurricane Hugo in 1989 and Hurricane Andrew in 1992. The assistance effort launched after the earthquake was the largest ever undertaken for a U. S. disaster. Applications to the Federal Emergency Management Agency for various forms of housing assistance totaled well over half a million. In the year following the earthquake, over 50,000 businesses applied to the U. S. Small Business Administration for disaster loans, and over $1.3 billion in loans had been paid out. This paper focuses on the immediate and longer-term impacts the earthquake had on businesses in the Greater Los Angeles region. The data reported here are based on a survey that the Disaster Research Center conducted with a representative, randomly-selected sample of businesses in the cities of Los Angeles and Santa Monica, two jurisdictions that were particularly hard-hit in the earthquake. The paper discusses the direct impacts and losses businesses experienced in the earthquake; the ways in which the disaster affected the operations of the businesses studied, including patterns of business interruption; earthquake preparedness measures undertaken by businesses, both prior to and after the disaster; and business recovery one-and-a-half years after the event