Application of Extreme Value Theory to Flood Damage

Abstract

Flood plain management requires assessment of the costs and benefits of all projects under consideration. The benefits translate mainly into flood damage reduction. This study presents a methodology for estimating flood damage prior to implementation of flood control structures. In this two‐stage, methodology, a hydroeconomic model for flood damage estimation is first developed, and a flood damage distribution function is then derived from the theory of extreme values in stochastic processes. The distribution function produces an estimation of actualized damages. The Richelieu River basin was selected for a numerical application because of its combined rural and urban characteristics and the fairly extensive sum of knowledge on the basin supplied by previous studies.