Hydrologic and Economic Uncertainties and Flood-Risk Project Design
Publication: Journal of Water Resources Planning and Management
Volume 125, Issue 6
Abstract
Hydrologic, hydraulic, and economic uncertainties impact the economic attractiveness of flood-risk management projects. In particular, uncertainty in the calculation of expected annual damages introduces uncertainty into economic evaluations. This study develops a hypothetical basin to explore the performance of designs identified by different economic-risk decision models. A new decision model includes an explicit quantification of uncertainty in the marginal net benefits and hence in the reliability of net benefits generated by the last increment of a project. Monte Carlo analyses show that the uncertainty in total project benefits may not reveal large uncertainties associated with the last increments of a project. In terms of economic performance of the different descriptions of hydrologic risk, expected probability and traditional maximum likelihood flood-risk estimators are roughly equivalent. The new decision model identified less costly projects that achieved nearly the same average net benefits and had a greater probability of recovering the last dollar spent.
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Information & Authors
Information
Published In
Journal of Water Resources Planning and Management
Volume 125 • Issue 6 • November 1999
Pages: 314 - 324
History
Received: Jan 26, 1999
Published online: Nov 1, 1999
Published in print: Nov 1999
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