Reduced-Form Economic Consequence Estimating Tool: Earthquakes Adam Rose (PI) and Nat Heatwole (Co-PI & Research Transition Lead) 1/5/15

2 Project Objectives Research goals –rapidly estimate economic consequences of hazard events using simple and transparent, yet defensible, models –provide this loss estimation capability in a compact, user-friendly software tool Research transition goals –ensure reduced-form earthquake tool is transitioned to the maximum number of users –expand reduced-form modeling approach to other types of hazards

3 DHS Interest and Motivation Why DHS would be interested –rapid loss estimates for resource mobilization (ex post) or benefit-cost analyses (ex ante) –minimal user inputs –straightforward outputs & uncertainty bands Potential DHS contact agencies –Domestic Nuclear Detection Office (DNDO) –Federal Emergency Management Agency (FEMA) –state/local first responders & emergency management officials

4 Potential non-DHS Stakeholders Federal agencies –National Oceanic and Atmospheric Administration (NOAA) –U.S. Depts. of Agriculture, Defense, Interior, & Transportation –U.S. General Services Administration (GSA) –U.S. Geological Survey (USGS) State/local agencies –California Earthquake Authority –California Emergency Management Agency –California Governor’s Office of Emergency Services –Los Angeles Dept. of Water and Power (LADWP) Others –academics/researchers –insurance firms

5 Interfaces to Related Research Others working on this –U.S. Geological Survey (USGS), Prompt Analysis of Global Earthquakes for Response (PAGER) program Interfaces with others in this field –reduced-form modeling approach used: by Rose, Heatwole, Dixon et al. in a CREATE report to the U.S. Nuclear Detection Office (DNDO) by Heatwole in a statistical analysis of economic cost of non-fatal injuries in terrorist attacks

6 Research Technical Plan Use data from SHELDUS (Spatial Hazard Events and Losses Database for the U.S.); supplement with primary data from media reports Formulate reduced-form model of property damage in major U.S. earthquakes as function of: –hazard-related variables (e.g., Richter magnitude) –exposure-related variables (e.g., population, income) Choose predictor variables for model using step- wise regression analysis

7 Research Transition Plan Work with Erroll & DHS to identify potential users - FEMA contacts - Professor Bill Siembieda for California contacts - NGOs (e.g., Red Cross, World Bank) Improve presentation of Rapid EQ Tool - improve statistical fit - provide back-cast estimates of actual events Present model to customers Complete work on tornado example

8 Milestones and Schedule/Timeline ActionDate Identify potential usersFebruary 15 Improve presentation of Rapid EQ tool March 1 Present model to customers March 1 to May 31 Complete work on tornado versionMay 1

9 Screenshot from Tool