Catastrophe Risk Models for Evaluating Disaster Risk Reduction Investments in Developing Countries

Submitted on 29th July 2015

This paper discusses a methodology that makes use of advanced probabilistic catastrophe models to estimate benefits of DRR measures. We apply such newly developed models to generate estimates for hurricane risk on residential structures in the island of St. Lucia, and earthquake risk on residential structures in Istanbul, Turkey as two illustrative case studies. The costs and economic benefits for selected risk reduction measures are estimated taking account of hazard, exposure and vulnerability. We conclude by emphasizing the advantages and challenges of catastrophe model-based cost-benefit analyses for DRR in developing countries.

Wharton University of Pennsylvania
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Erwann Michel-Kerjan, Stefan Hochrainer-Stigler, Howard Kunreuther, Joanne Linnerooth-Bayer, Reinhard Mechler, Robert Muir-Wood, Nicola Ranger, Pantea Vaziri, Michael Young
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