The Northridge earthquake of 1994 created a surprising amount of damage to homes located on the hillsides of Los Angeles. Of approximately 10,000 hillside homes, 374 were damaged, some severely. This report examines three different representations, or “decision frames,” of the decision to improve the earthquake safety of hillside homes. The first decision frame is that of a safety engineer in a regulatory agency concerned with developing a city ordinance to reduce the future earthquake damage to hillside homes. The second decision frame is that of an individual homeowner, contemplating the decision to spend money on retrofitting his or her home to reduce the risk of earthquake damage. The third decision frame is that of an economist concerned with setting regulations that produce the largest net social benefits. Based on a review of the engineering and economic issues, and interviews with engineers and homeowners, three formal decision models were developed that represented these decision frames. Each of the models resulted in different recommendations. The regulatory model suggested the most stringent and costly retrofitting measures. The individual homeowner model suggested no retrofits. The economic model suggested minor retrofits. The report concludes that resistance to implementation of earthquake ordinances by individual homeowners may not be irrational, but merely due to a decision frame that is different from those of an economist or engineer. Understanding the decision frames of people who eventually have to pay the cost of the regulations, and providing appropriate incentives for implementation should therefore be an important part of both regulatory and economic analysis.
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