ABSTRACT
The purpose of this study is to evaluate the impact of volcanic eruptions on the economy of
affected communities. The island on Vulcano, Italy, is chosen as the case study to investigate the
impact of a future eruption of La Fossa volcano on the economy of the island. One of the reasons
that make Vulcano an appropriate choice is that detailed hazard assessment, which is crucial for
crisis management, is conducted by Biass et al. (2016), Dellino et al. (2011) and Bonadonna et al.
(2011). Another reason is that the economic setting is relatively simple due to the fact that the
economy is almost completely tourism-dependent. Here, we aim to provide a comparative data
for civil authorities in order to help them to give more conscious decisions in case of increasing
volcanic activity on the island.
According to the earlier studies held by Biass et al., tephra fallouts affect mostly the southern
parts of the island due to the wind patterns throughout the year, whereas ballistic ejections affect
the whole island with the exception of the southernmost part of the island, Gelso. Bonadonna et
al., suggests that the north of the island is highly exposed to lahars. According to Dellino et al.,
surges (dilute pyroclastic density currents) may affect the whole island after a future eruption.
The hazard assessment is combined with economic data collected through field investigations and
online researches between 2014 and 2016, in order to evaluate the cost of an evacuation and the
impact on the economy on the island. Our findings suggest that, the island's annual revenue
generating from tourism-related businesses is about 35 million euro. 51% of this revenue comes
from hotels. The restaurants, B&Bs and the leisure activities provide 37%, 7% and 5%
respectively. Finally, we study the loss of revenue due to touristic business interruption as a
function of time (two scenarios considered, one for June and one for November) and space, to
evaluate both the influence of different seasons and partial and/or total evacuation on the island.
According to our calculations, an evacuation starting in June, lasting up to 6 months generates
almost 95% more revenue loss than an evacuation starting in November. In case of a partial
evacuation, no difference is seen in terms of revenue loss between Porto and Vulcanello, if the
evacuation starts in November and lasts for maximum 6 months. On the contrary, if 6 months of
evacuation starts from June, the revenue loss is 30-50% higher than the revenue loss in
Vulcanello. A total evacuation on the island, regardless of the timing and the duration, results in
30-50% more revenue loss than partial evacuation of Porto and 45-70% more revenue loss than
the partial evacuation of Vulcanello.