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Benefit-Cost Analysis of FEMA Hazard Mitigation Grants

Author

Listed:
  • Adam Rose
  • Keith Porter
  • Nicole Dash
  • Jawhar Bouabid
  • Charles Huyck
  • John C. Whitehead
  • Douglass Shaw
  • Ronald T. Eguchi
  • Craig Taylor
  • Thomas R. McLane
  • L. Thomas Tobin
  • Philip T. Ganderton
  • David Godschalk
  • Anne S. Kiremidjian
  • Kathleen
  • Carol Taylor West

Abstract

Mitigation ameliorates the impact of natural hazards on communities by reducing loss of life and injury, property and environmental damage, and social and economic disruption. The potential to reduce these losses brings many benefits, but every mitigation activity has a cost that must be considered in our world of limited resources. In principle benefit-cost analysis (BCA) can be used to assess a mitigation activity’s expected net benefits (discounted future benefits less discounted costs), but in practice this often proves difficult. This paper reports on a study that refined BCA methodologies and applied them to a national statistical sample of FEMA mitigation activities over a ten-year period for earthquake, flood, and wind hazards. The results indicate that the overall benefit-cost ratio for FEMA mitigation grants is about 4 to 1, though the ratio varies according to hazard and mitigation type.

Suggested Citation

  • Adam Rose & Keith Porter & Nicole Dash & Jawhar Bouabid & Charles Huyck & John C. Whitehead & Douglass Shaw & Ronald T. Eguchi & Craig Taylor & Thomas R. McLane & L. Thomas Tobin & Philip T. Ganderton, 2006. "Benefit-Cost Analysis of FEMA Hazard Mitigation Grants," Working Papers 06-02, Department of Economics, Appalachian State University.
  • Handle: RePEc:apl:wpaper:06-02
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    File URL: http://econ.appstate.edu/RePEc/pdf/wp0602.pdf
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    Cited by:

    1. Paweł Bogawski & Ewa Bednorz, 2016. "Atmospheric conditions controlling extreme summertime evapotranspiration in Poland (central Europe)," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 81(1), pages 55-69, March.
    2. John Whitehead & Adam Rose, 2009. "Estimating environmental benefits of natural hazard mitigation with data transfer: results from a benefit-cost analysis of Federal Emergency Management Agency hazard mitigation grants," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 14(7), pages 655-676, October.

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