Most studies that evaluate drought damage look at past drought events on an ex post (after the event) basis. They use self-reports or media accounts, or compare production for drought and non-drought years (Martin-Ortega and Markandya 2009). These ex post approaches may fail to determine susceptibility to drought, due to predefined relations between certain drought hazard and resistance parameters and expected damage. Moreover, they also fail to deal with the dynamics of drought risk and damage over time. Specific problems include potential bias from self-reports and media accounts of damage, and significant uncertainty in comparisons between drought and non-drought agricultural production. Additionally, these comparisons fail to account for factors other than drought that influence production. They do not distinguish between direct drought effects that damage crops and indirect effects spreading through the economy.
A further problem with current drought damage models is that they are not designed to account for drought mitigation measures. This means that the damage-reducing effects of drought mitigation measures are largely unknown, a situation that makes choosing among the different mitigation measures difficult.
This lack of information about mitigation strategies is especially problematic in the case of drought-related soil subsidence. Existing studies suggest that soil subsidence (which can severely damage buildings) can be as destructive as other large-scale natural disasters, such as floods, yet little is known about how best to reduce its impact.