Earthquake vulnerability reduction program in Colombia a probabilistic cost-benefit analysis

"Cost-benefit analysis is a standard tool for determining the efficiency of planned projects. But one of the major difficulties in risk mitigation investments is that benefits are by nature uncertain. In this context, the standard approach relying on the average value of benefits may provide an...

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Bibliographic Details
Main Author: Ghesquiere, Francis
Corporate Author: World Bank
Other Authors: Jamin, Luis
Format: eBook
Language:English
Published: [Washington, D.C] World Bank 2006
Series:Policy research working paper
Subjects:
Online Access:
Collection: World Bank E-Library Archive - Collection details see MPG.ReNa
Description
Summary:"Cost-benefit analysis is a standard tool for determining the efficiency of planned projects. But one of the major difficulties in risk mitigation investments is that benefits are by nature uncertain. In this context, the standard approach relying on the average value of benefits may provide an incomplete picture of the efficiency of the risk mitigation project under consideration. This paper presents a probabilistic cost-benefit analysis relying on a catastrophe risk model. It produces risk metrics such as the exceedance probability curve of the benefit-cost ratio, thus providing the decisionmaker with a more complete risk analysis of the net benefits of the project. This is illustrated with the earthquake vulnerability reduction project in Colombia. "--World Bank web site
Item Description:Includes bibliographical references. - Title from PDF file as viewed on 8/30/2006