Methodology for benefit–cost analysis of seismic codes

A number of high-profile seismic events have occurred in recent years, with a wide variation in the resulting economic damage and loss of life. This variation has been attributed in part to the stringency of seismic building codes implemented in different regions. Using the HAZUS Earthquake Model, a benefit–cost analysis was performed on varying levels of standard buildings codes for Haiti and Puerto Rico. The methodology computes expected loss assuming a Poisson event process with lognormally distributed event magnitude and idealized damage–magnitude response functions. The event frequency and magnitude distributions are estimated from the historical record, while the damage functions are fit using HAZUS simulation results for events with systematically varying magnitudes and different seismic code levels. To validate the approach, a single-event analysis was conducted using alternative building codes and mean magnitude earthquakes. A probabilistic analysis was then used to evaluate the long-term expected value for alternative levels of building codes. To account for the relationship between lives saved and economic loss, the implicit cost of saving a life is computed for each code option. It was found that in the two areas studied, the expected loss of life was reduced the most by use of high seismic building code levels, but lower levels of seismic building code were more cost-effective when considering only building damages and the costs for code implementation. The methodology presented is meant to provide a basic framework for the future development of an economic-behavioral model for code adoption. Copyright Springer Science+Business Media B.V. 2012