How much do we know about the mental health economic costs of disasters?

This literature review focuses on the economic quantifications of the mental health consequences of disasters and how these mental health impacts can shape people’s economic trajectories. Disasters' adverse impacts on human health are not limited to physical health but extend to mental health and well-being. Multiple causal mechanisms can affect mental health, including direct physical injury and disability, psychological trauma, the loss of loved ones, displacement, and socioeconomic stressors associated with the disaster recovery process. This work reviews the literature focusing on the economic quantification of the mental health consequences of disasters, examining both how economic circumstances can contribute to or ameliorate mental health impacts, and how these impacts can shape people's economic trajectories. Several methods that can be used to quantify these costs are also reviewed.

The findings include several cost-effectiveness studies of interventions evaluated through quality-adjusted life years (QALY) metrics, with the strengths and weaknesses of each approach assessed alongside their respective quantifications. Since these quantifications indicate that mental health costs can be substantial, their exclusion from standard disaster risk assessments leads to an underestimation of disasters' total social costs and, consequently, to underinvestment in disaster risk-reduction measures. Quantifying these mental health costs may therefore yield a more comprehensive understanding of disaster losses and help inform decisions about appropriate levels of investment in prevention and mitigation.