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 incom...

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Main Authors:	Ghesquiere, Francis, Jamin, Luis, Mahul, Olivier
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ASSET CLASSIFICATION ASSET VALUE AVALANCHES BONDS CATASTROPHIC EVENTS CATASTROPHIC RISKS CONTINGENCY PLANNING COST OF CAPITAL COVERAGE DISASTER DISASTER EVENT DISASTER EVENTS DISASTER MANAGEMENT DISASTER MITIGATION DISASTER PREPAREDNESS DISASTER RESPONSE DISASTER RISK DISASTERS DISCOUNT RATES DROUGHT EARTHQUAKE EARTHQUAKES EMERGENCY PREPAREDNESS EXPECTED VALUE FINANCIAL MARKETS FLOODING FLOODS HOUSING HURRICANES INSURANCE INSURERS INTEREST RATE INVENTORY INVESTMENT AMOUNT INVESTMENT BUDGETS INVESTMENT DECISIONS INVESTMENT PROGRAMS LATIN AMERICAN LOAN FINANCING MITIGATION MEASURES MUNICIPALITIES NATURAL DISASTER NATURAL DISASTERS NPV PORTFOLIO PREMIUMS PRESENT VALUE PROGRAMS PUBLIC INVESTMENT RATE OF RETURN RATES RISK ANALYSIS RISK ASSESSMENT RISK ASSESSMENTS RISK EXPOSURE RISK MANAGEMENT RISK MANAGERS RISK MITIGATION RISK PREMIUM RISK PREMIUMS RISK REDUCTION RISK TRANSFER SOLVENCY URBANIZATION
Online Access:	http://documents.worldbank.org/curated/en/2006/06/6840083/earthquake-vulnerability-reduction-program-colombia-probabilistic-cost-benefit-analysis http://hdl.handle.net/10986/8438

id	okr-10986-8438
recordtype	oai_dc
spelling	okr-10986-84382021-04-23T14:02:41Z Earthquake Vulnerability Reduction Program in Colombia : A Probabilistic Cost-benefit Analysis Ghesquiere, Francis Jamin, Luis Mahul, Olivier ASSET CLASSIFICATION ASSET VALUE AVALANCHES BONDS CATASTROPHIC EVENTS CATASTROPHIC RISKS CONTINGENCY PLANNING COST OF CAPITAL COVERAGE DISASTER DISASTER EVENT DISASTER EVENTS DISASTER MANAGEMENT DISASTER MITIGATION DISASTER PREPAREDNESS DISASTER RESPONSE DISASTER RISK DISASTERS DISCOUNT RATES DROUGHT EARTHQUAKE EARTHQUAKES EMERGENCY PREPAREDNESS EXPECTED VALUE FINANCIAL MARKETS FLOODING FLOODS HOUSING HURRICANES INSURANCE INSURERS INTEREST RATE INVENTORY INVESTMENT AMOUNT INVESTMENT BUDGETS INVESTMENT DECISIONS INVESTMENT PROGRAMS LATIN AMERICAN LOAN FINANCING MITIGATION MEASURES MUNICIPALITIES NATURAL DISASTER NATURAL DISASTERS NPV PORTFOLIO PREMIUMS PRESENT VALUE PROGRAMS PUBLIC INVESTMENT RATE OF RETURN RATES RISK ANALYSIS RISK ASSESSMENT RISK ASSESSMENTS RISK EXPOSURE RISK MANAGEMENT RISK MANAGERS RISK MITIGATION RISK PREMIUM RISK PREMIUMS RISK REDUCTION RISK TRANSFER SOLVENCY URBANIZATION 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. 2012-06-19T17:16:15Z 2012-06-19T17:16:15Z 2006-06 http://documents.worldbank.org/curated/en/2006/06/6840083/earthquake-vulnerability-reduction-program-colombia-probabilistic-cost-benefit-analysis http://hdl.handle.net/10986/8438 English Policy Research Working Paper; No. 3939 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Colombia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ASSET CLASSIFICATION ASSET VALUE AVALANCHES BONDS CATASTROPHIC EVENTS CATASTROPHIC RISKS CONTINGENCY PLANNING COST OF CAPITAL COVERAGE DISASTER DISASTER EVENT DISASTER EVENTS DISASTER MANAGEMENT DISASTER MITIGATION DISASTER PREPAREDNESS DISASTER RESPONSE DISASTER RISK DISASTERS DISCOUNT RATES DROUGHT EARTHQUAKE EARTHQUAKES EMERGENCY PREPAREDNESS EXPECTED VALUE FINANCIAL MARKETS FLOODING FLOODS HOUSING HURRICANES INSURANCE INSURERS INTEREST RATE INVENTORY INVESTMENT AMOUNT INVESTMENT BUDGETS INVESTMENT DECISIONS INVESTMENT PROGRAMS LATIN AMERICAN LOAN FINANCING MITIGATION MEASURES MUNICIPALITIES NATURAL DISASTER NATURAL DISASTERS NPV PORTFOLIO PREMIUMS PRESENT VALUE PROGRAMS PUBLIC INVESTMENT RATE OF RETURN RATES RISK ANALYSIS RISK ASSESSMENT RISK ASSESSMENTS RISK EXPOSURE RISK MANAGEMENT RISK MANAGERS RISK MITIGATION RISK PREMIUM RISK PREMIUMS RISK REDUCTION RISK TRANSFER SOLVENCY URBANIZATION
spellingShingle	ASSET CLASSIFICATION ASSET VALUE AVALANCHES BONDS CATASTROPHIC EVENTS CATASTROPHIC RISKS CONTINGENCY PLANNING COST OF CAPITAL COVERAGE DISASTER DISASTER EVENT DISASTER EVENTS DISASTER MANAGEMENT DISASTER MITIGATION DISASTER PREPAREDNESS DISASTER RESPONSE DISASTER RISK DISASTERS DISCOUNT RATES DROUGHT EARTHQUAKE EARTHQUAKES EMERGENCY PREPAREDNESS EXPECTED VALUE FINANCIAL MARKETS FLOODING FLOODS HOUSING HURRICANES INSURANCE INSURERS INTEREST RATE INVENTORY INVESTMENT AMOUNT INVESTMENT BUDGETS INVESTMENT DECISIONS INVESTMENT PROGRAMS LATIN AMERICAN LOAN FINANCING MITIGATION MEASURES MUNICIPALITIES NATURAL DISASTER NATURAL DISASTERS NPV PORTFOLIO PREMIUMS PRESENT VALUE PROGRAMS PUBLIC INVESTMENT RATE OF RETURN RATES RISK ANALYSIS RISK ASSESSMENT RISK ASSESSMENTS RISK EXPOSURE RISK MANAGEMENT RISK MANAGERS RISK MITIGATION RISK PREMIUM RISK PREMIUMS RISK REDUCTION RISK TRANSFER SOLVENCY URBANIZATION Ghesquiere, Francis Jamin, Luis Mahul, Olivier Earthquake Vulnerability Reduction Program in Colombia : A Probabilistic Cost-benefit Analysis
geographic_facet	Latin America & Caribbean Colombia
relation	Policy Research Working Paper; No. 3939
description	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.
format	Publications & Research :: Policy Research Working Paper
author	Ghesquiere, Francis Jamin, Luis Mahul, Olivier
author_facet	Ghesquiere, Francis Jamin, Luis Mahul, Olivier
author_sort	Ghesquiere, Francis
title	Earthquake Vulnerability Reduction Program in Colombia : A Probabilistic Cost-benefit Analysis
title_short	Earthquake Vulnerability Reduction Program in Colombia : A Probabilistic Cost-benefit Analysis
title_full	Earthquake Vulnerability Reduction Program in Colombia : A Probabilistic Cost-benefit Analysis
title_fullStr	Earthquake Vulnerability Reduction Program in Colombia : A Probabilistic Cost-benefit Analysis
title_full_unstemmed	Earthquake Vulnerability Reduction Program in Colombia : A Probabilistic Cost-benefit Analysis
title_sort	earthquake vulnerability reduction program in colombia : a probabilistic cost-benefit analysis
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2006/06/6840083/earthquake-vulnerability-reduction-program-colombia-probabilistic-cost-benefit-analysis http://hdl.handle.net/10986/8438
_version_	1764406277574754304

Earthquake Vulnerability Reduction Program in Colombia : A Probabilistic Cost-benefit Analysis

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