Benefit-cost analysis of flood-mitigated residential buildings in Louisiana

ABSTRACT

Benefit-cost analysis (BCA) is a computational tool that can help to determine the economic benefits of mitigation. Many factors required to be considered in BCA but the lack of information on these factors holds decision-makers to correctly understand the economic benefits of mitigation. This study aims to improve the understanding of the economic benefits of flood mitigation efforts in Louisiana between 2005 and 2015. The mitigation projects were evaluated through a novel methodology using two post-mitigation events and a series of probabilistic events. Two major floods in 2016 in Louisiana were simulated for post-mitigation events. The study with probabilistic events was performed through a case study for residential buildings in Jefferson Parish, Louisiana. A Monte Carlo simulation was used to simulate the elevation of flooding for buildings. The novel approach in methodology shows the effect of loss function uncertainty in the context of avoided loss (AL) analysis with adjusted costs for buildings useful life. The AL and BCA indicate that mitigated buildings were associated with an average AL of $114,206 and benefit-cost ratio (BCR) of 0.76 after the 2016 floods in Louisiana, respectively. Also, the loss analysis with probabilistic events revealed an average BCR of 1.69 for flood-mitigated projects.

KEYWORDS:

• Avoided loss
• benefit-cost
• flood loss analysis
• mitigation
• Monte Carlo simulation

Acknowledgments

This research was supported by FEMA Grant 4080-DR-LA (Project 0017 Statewide Hazard Mitigation Community Education and Outreach Project, CFDA 97-039) through the GOHSEP “Economic Benefit of Mitigation” Project. Any opinions, findings, and conclusions or recommendations expressed in this paper are those of the authors and do not necessarily reflect the views of FEMA or GOHSEP. The authors appreciate the help of graduate students in the Bert S. Turner Department of Construction Management, and the Department of Geography & Anthropology at Louisiana State University for collecting data from LAHM online dataset.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the Federal Emergency Management Agency [4080-DR-LA].

Notes on contributors

Arash Taghinezhad

Arash Taghinezhad is a postdoctoral researcher at Louisiana State University (LSU). He has a Ph.D. in Eng. Science (Construction Management major/Applied Statistics minor), two MS degree in Construction Management, and Eng. Science, and a BS degree in Civil Engineering. He is a specialist in benefit-cost analysis of hurricane wind and flood mitigation, mitigation project cost estimation, probabilistic risk assessment, and statistical modeling of data in natural hazard studies.

Carol J. Friedland

Carol J. Friedland, P.E., Ph.D., C.F.M. is an Associate Professor at Louisiana State University specializing in construction management. Friedland’s research interests include combined hurricane wind and flood interactions on structures; hazard-resistant construction and mitigation; performance of housing and other built infrastructure subjected to natural hazards; post-hurricane hazard (e.g., wind, storm surge) and damage data acquisition; remote sensing of building damage from natural hazards; and rapid, efficient data collection, storage, and processing. Friedland is a Professional Engineer and ASFPM Certified Floodplain Manager. She sits on the Structural Wind Engineering Committee (SWEC); ASCE 7 Standard Flood Loads Subcommittee; ASCE 24 Standard Committee for Flood Resistant Design and Construction; ASCE Technical Activities Committee on Dynamic Effects; Multiple Hazard Mitigation Committee; and the Steering Committee for the Americas Conference on Wind Engineering. Previously, she served on the ASCE Energy Division, Petrochemical Committee, Task Committee on Wind-Induced Forces.

Robert V. Rohli

Robert V. Rohli is a Professor at Department of Oceanography & Coastal Sciences at Louisiana State University. His research and teaching interests are in hydroclimatology and atmospheric circulation variability and its impacts. He also has broader research and teaching interests in education, and metacognition.