A method of cost-benefit analysis under uncertainty is presented for different policies of building codes and for upgrading the old existing structures. The tools are those of risk and decision analysis, assuming that expected values are a sound basis for decisions in the public sector.
The method relies on the assessment of the expected value of the losses due to an earthquake per year in a given region, on the basis of a set of iso-intensity maps of the area. The expected value of the loss is computed for different levels of building codes. Costs and benefits are evaluated over a 50-yr period. An expected cost per life saved is computed, allowing comparison with other means of mitigation of earthquake effects—e.g., earthquake prediction—and with other sectors involving life saving programs.
An example with rough numerical data has been presented for the San Francisco Bay Area. It gives, for the 1973 and the 1976 versions of the Uniform Building Code (UBC), the expected cost per life saved in buildings subjected to earthquakes per type of use and per type of structure. The method allows an assessment of the marginal economic effects of further building code requirements according to the type of structure and the level of occupancy.