Diagnosis and Quantification of Postdisaster Construction Material Cost Fluctuations

Abstract

The postdisaster survival of communities and cities largely depends on their capabilities to rapidly reconstruct damages. Temporary increases in construction costs following natural hazards, also known as demand surge, impede the rapid postdisaster reconstruction process. Existing methods for quantifying postdisaster construction cost escalations do not consider seasonal patterns and inflation of costs under normal conditions. Therefore, it is not clear whether the quantified construction cost increases are due to a disaster or merely associated with seasonal patterns and inflation. The objectives of this study are to (1) create an approach to statistically quantify postdisaster construction material cost fluctuations considering regional seasonal patterns and inflation of construction material costs in normal condition (no disaster); and (2) apply the approach to identify the most vulnerable construction materials following Hurricane Katrina in New Orleans, Louisiana. The authors created an approach based on cumulative sum (CUSUM) control charts and seasonal autoregressive integrated moving average (seasonal ARIMA) models to measure postdisaster construction material cost fluctuations. This approach is applied to quantify construction material cost fluctuations following Hurricane Katrina in New Orleans, Louisiana. The results indicate three different patterns in the postdisaster cost movements: (1) a statistically significant increase in the cost of materials such as I-beams and channel beams, (2) a statistically significant decrease in the cost of materials such as pine lumber, and (3) no statistically significant changes in the cost of materials such as reinforced concrete pipes. These findings are expected to help property insurers, capital planners, and construction engineers to estimate postdisaster cost fluctuations more accurately. They also help identify the most vulnerable construction materials to disasters.