Project Title/ID Number Analytic Models for PBEE Decisions—1252002
Start/End Dates 10/1/02—9/30/03
Project Leader Jacqueline Meszaros (UW/Faculty)
Team Members Ufuk Ince (UW/Faculty), Sonnier Francisco (UW/Grad Student)
Project goals and objectives

Translate our understanding of how mitigation decisions are made into useful analytical models (including financial and nonfinancial variables) for seismic hazard mitigation investment decisions.

Role of this project in supporting PEER’s vision
  1. Identifying the Decision Variables (DVs) that matter to decision makers in for-profit organizations
  2. Identifying barriers to and promoters of PBEE use
  3. Translating engineering Damage Measure (DM) information into the DVs that matter to decision makers
  4. Creating a decision tool to enable decision makers to compare mitigation alternatives in terms of the DVs that matter to them, including sensitivity analyses and distributions of DVs
  5. Supporting the Van Nuys testbed
Methodology employed
  • Survey research
  • Case study research
  • Financial simulation modeling
Brief description of past year’s accomplishments and more detail on expected Year 6 accomplishments

Year 5:

  • Six case studies of mitigation decisions by large firms
  • Review of financial investment models pertinent to EQ
  • Fielded survey of small businesses following Nisqually EQ

Year 6:

  • Constructed decision-support model that aids decision-makers in comparing mitigation alternatives
  • Applied model to Van Nuys testbed
  • Survey of engineers’ experiences in using PBEE, lessons for promotes and hinders PBEE adoption
  • Analysis of Nisqually data: organizational predictors of mitigation
Other similar work being conducted within and outside PEER and how this project differs

Related work on losses from the Nisqually earthquake (sponsored by the Economic Development Administration as well as PEER) was completed in Year 6.

Plans for Year 7 if this project is expected to be continued
  • Add value at risk and risk of ruin to decision model
  • Develop simulation results for costs (current estimates are not solid enough)
  • Develop simulation results for other decision variables
  • Develop comparison of mitigation vs. insurance vs. other options. Field cross-functional survey of how practitioners make these tradeoffs
  • Cross-functional survey on risk perceptions, mitigation priorities and responses to ambiguity
  • Cross-functional survey of how practitioners respond to different ways of presenting decision variables
  • Case study examination of use/non-use of complex analyses for ambiguous, low-probability decision contexts
  • Extend engineer survey on client priorities and engineer needs to a large sample of California-based engineers.
Describe any instances where you are aware that your results have been used in industry

Our results concerning which companies did and did not mitigate against earthquake following Nisqually were reported by the Seattle Times, Tacoma News Tribune, local National Public Radio and KOMO News Radio on the second anniversary of the quake. Their reports emphasized that businesses may not yet be well prepared for earthquakes.

Expected milestones

Interactive software model for PBEE decision makers to use in assessing the desirability of alternative earthquake mitigation investments. Model includes financial and non-financial decision variables.

  • Interactive software model (including Van Nuys application)
  • Working paper on predictors of mitigation for small businesses
  • Working paper on communication between engineers and managers, including discussion of case-study results on how mitigation investment decisions are made in large firms.