Benefit-Cost Analysis for Earthquake Early Warning in Washington State

Abstract

This benefit-cost analysis (BCA) assesses the economic value of the implementation and operation of an earthquake early warning system (EEWS) over a 50-year period in the state of Washington. Based on a cost avoidance approach to assess benefits, this analysis compares the expected economic losses under earthquake scenarios with and without an operating EEWS. The FEMA’s earthquake economic loss software program, Hazards US Multi-Hazard (HAZUS-MH), is used to make these comparisons. This analysis demonstrates the net benefits of an EEWS for Washington residents. A Monte Carlo simulation predicts a positive net present value for Washington residents at a 98% probability. A mean savings of $289 million is predicted from the implementation and operation of the proposed EEWS, an amount that considers only some of the potential benefits.