Economic Adjustment
All economic damage in EM-DAT is expressed in thousands of US$ (see Column Description and Economic Impact Variables). For each disaster, the registered figure corresponds to value of the damage at the moment of the event. If a source reports damage in another currency, it is first converted to US$ before it is entered in EM-DAT using a converter (see this example), at the exchange rate when the damage occurred.
The adjusted economic losses in EM-DAT provide a monetary value in US$ that has been adjusted for inflation (see Column Description). The adjustment is linearly proportional to the OECD Consumer Price Index (CPI) provided by the Organization for Economic Cooperation and Development (OECD). The CPI reflects the change in prices of a basket of goods and services that are typically purchased by specific groups of households. EM-DAT relies on the total CPI, i.e., including both food and energy products in the basket, defined for the USA.
In practice, OECD provides the US CPI with 2015 as the base year (\(CPI_{2015}=100\), see Consumer prices for G20 ). In EM-DAT, the CPI is rescaled to use the last year as a reference, e.g., \(CPI_{2021}=100\). The rescaling is performed when the OECD CPI value becomes available. The economic losses given for the current year are therefore not adjusted and not reported in the column Total Damages, Adjusted ('000 US$).
How to Compute an Adjusted Economic Impact
For a given year \(Y\) and its rescaled CPI value \(CPI_y\), a monetary loss \(X\) is adjusted into a year-specific \(X_{adj}\) based on the formula:
*2021 is here given as an example. In the EM-DAT Public Table, the annual CPI values are adapted and rescaled from OECD values to ensure that we have the latest year available at the 100 value. This does not affect the end result as the CPI ratio between years is conserved.
Examples
For instance, on December 25, 2022, a disaster entry that occurred in 2021 would have a CPI value of 100. A disaster that has occurred in 2022 will not have a CPI value; hence, no economic losses will be mentioned in the Total Damages, Adjusted ('000 US$) column.
If a disaster has an economic loss of 1 million US$ in 2019 with a rescaled CPI value of 93, the adjusted damage would be 100×1,000,000/93=1,075,000 US$.