Investigating the Effect of Flood 2019 on Production and Employment in Iran's Agricultural Sector Using the Generalized Hypothetical Extraction Method

The occurrence of floods during the 2019 water year in various parts of Iran has resulted in tremendous casualties and financial losses This study aimed at investigating the impact of the flood 2019 on the agricultural sector and the impacts of this sectoer's damages on the other sectors of Iran's economy as well as determining the degree of dependence of the agricultural sector on other sectors. For this purpose, the generalized hypothetical extraction method of Dietzenbacher and Lahr was used in two scenarios. In the first scenario, first, the reduced share of the agricultural sector output during the flood was calculated at 28 percent; then, the estimated value was used to perform the generalized hypothetical extraction method in order to specify its impacts on the output and employment of the agricultural sector and the impact of this sector on the other economic sectors. In the second scenario, the same method was applied using a 10 percent negative shock in this sector. The study results indicated that in the first scenario, the economy's total output would decrease by approximately 130102 million IR rials (31.1 percent), and the agricultural sector as well as the electricity, water, and gas sub-sectors would be most affected; from an employment viewpoint, this reduction would have the highest impact on the agricultural sector followed by wholesale and retail services. In the second scenario, the economy's total output would decrease by approximately 68677 million IR rials (17.44 percent), having the highest impact on the output of the agricultural sector as well as the electricity, water, and gas sub-sector. Therefore, after compensating the damage in the agricultural sector, the damage to other economic sectors, especially the electricity, water and gas sub-sector (in terms of production), and the wholesale and retail services (in terms of employment) should be considered for compensation efforts.