Performance Based Strategy Evaluation Methodology for Earthquake Risk Management

Today, there are different perceptions about the effectiveness of earthquake risk management strategies. While researchers propose that each dollar invested in a strategy saves multiple dollars in reduced damage. the public's perception is that mitigation is too expensive. These conflicting opinions remain unresolved because currently. there is no strategy evaluation technique that can deal with different issues involved. Past studies primarily focused on property and life loss benefits.. but in reality people have additional concerns such as loss of utilities and recovery efficiency. For a policy maker. a major concern is likelihood of implementation. Since these issues have not been addressed.. three critical questions remain unanswered: how much mitigation is enough: who pays and benefits; and what benefits are received for every investment in a strategy.

The current research develops a comprehensive strategy evaluation methodology to provide an answer to these questions. Strategy Effectiveness Charts (SEC) present a unique graphical comparison of the effectiveness of strategies at an individual group or regional level. Effectiveness is evaluated in terms of a new measure. performance in an earthquake. Performance incorporates issues associated with different types of losses post-event recovery efficiency. as well as likelihood of implementation of a strategy. Each SEC provides information about pre and post mitigation performance for different strategies. and costs of implementation.

The value of the SEC's lie in that in addition to identifying optimal strategies for a user, charts can be developed for specific applications by different groups. Emergency management agencies can use SEC's as a medium for information transfer to encourage mitigation by the general public. Insurance companies could develop SEC's to evaluate rates for insurance policies, contingent on amount of retrofit. Commercial businesses can use SEC~s to estimate investments required to maintain a desired level of performance in future earthquakes. Finally, governments can incorporate SEC's into policy development to study how regional performance varies over time.. with and without mitigation.

Each SEC is developed in three steps. (1) Loss and recovery data are generated for a range of earthquake scenarios in a region and relevant information for the intended user of an SEC is isolated. (2) Pre-mitigation performance is evaluated using scenario data and socio-economic characteristics of a user. (3) Post-mitigation performance is estimated for each strategy based on its effect on scenario data and its likelihood of implementation. Results are presented in the appropriate format of an SEC. In this research, charts are developed for the residential, commercial, lifeline.. and government sectors in Los Angeles County and the San Francisco Bay Area. Also, customized SEC's are developed to address risk management issues for specific users such as an insurance company and an emergency management agency.

The case studies present interesting conclusions. (1) Lifeline and commercial sectors are critical in improving regional performance. (2) High cost strategies are only effective when focused on low performance groups. (3) A combination of retrofit and insurance is beneficial both to homeowners and insurance companies. (4) A low limit. low deductible policy is effective for homeowners. (5) To best improve regional performance.. a government should invest in vulnerable targets like low income housing.

The results of this research reinforce the fact that it is necessary to adopt a holistic. multidisciplinary approach to the problem of earthquake risk management. The SEC methodology presents an example of such an approach and is intended to act as a framework for future multidisciplinary research in all-hazard risk management.