New York Times Op Ed

I had an Op-Ed in the May 14, 2015 New York Times.  It summarizes the work I did in Canada on a benefit/cost analysis of the Moore Enhanced Building codes.  The academic paper came out last month in Weather, Climate and Society and is co-authored with Greg Kopp at the University of Western Ontario and Paul Kovacs, Executive Director for the Institute for Catastrophic Loss Reduction.  The Op-Ed can be found here.

Straw, Sticks or Bricks: An Empirical Test of the the Three Little Pigs

In May 2013 two violent tornadoes roared through central Oklahoma.  The first, struck Moore on May 20, the third time in 14 years the town experienced a violent tornado.  An estimated $3 billion[1] in damages resulted from that storm alone as well as causing 24 fatalities and hundreds of injuries.  The most tragic result was the death of 7 children at Plaza Towers Elementary School.  Tragedy can bring change as residents struggle with how to respond to such an event.  For the city of Moore, it was time to consider revising their building codes raising the wind load standard from 90 to 135 mph.  This change was designed to build homes that would remain essentially intact for all but the most extreme tornadoes thus lowering the cost to rebuild and perhaps providing a safer home for residents.  It would be difficult to estimate the effect these code changes may have on casualties but a benefit/cost analysis can determine if the code changes will provide financial benefits to the community.  This became the focus of my appointment as a Fulbright Scholar in Canada last year.  I collaborated with Greg Kopp, a Wind Engineer at the University of Western Ontario and Paul Kovacs, the Executive Director of the Institute for Catastrophic Loss Reduction in Toronto to undertake a benefit/cost analysis of the recently adopted new building codes for Moore, OK.  The paper is published by Weather, Climate and Society and can be found here.

To conduct the benefit/cost analysis, three pieces of information must be estimated.  First, how much does the new code add to the cost of construction?  Second, how much damage from future storms can be mitigated by the new code and finally, how much potential damage can be expected across the life of the structure?  The first question was answered by the Moore Association of Home Builders and the engineering consultants hired by Moore.  Their estimate is that implementation of the new codes will cost $1 per square foot.[2] 

A more challenging question is to provide an estimate of the reduction in damages that can be expected from the new code.  The new code required roof rafters to be closer together, hurricane straps for the roof/wall connections, anchor bolts to tie the exterior walls to the foundation, better exterior sheathing and wind rated garage doors.  While the code was designed for wind fields through EF-2, fully 70% of all tornado[3] related damage comes from tornadoes rated EF-3 and above.  But the rating given to a tornado refers to damage consistent with the highest wind detected within the path and does not reflect the wind field for the entire life or area of the tornado.  So a home subjected to an EF-5 tornado may benefit from the new code since almost 90%[4] of the wind field in an EF-5 tornado is EF-2 and less, on average.  Once damage is examined by wind field, rather than tornado rating, 46% of the overall damage comes from wind fields that are EF-2 and less.  Our estimate is that 65% of the EF-0 through EF-2 damage can be mitigated by the new code reducing overall tornado damage by 30%.

The final variable needed is an estimate of future tornado damage.  Since the area of one city is small, it is better to make this estimate for an entire state.  Oklahoma has experienced almost $32 billion in tornado damage from 1989-2012.[5]  The Oklahoma Department of Insurance reports that 65% of that damage is residential so an annual average of $832 million is our estimate of annualized residential damage in current dollars.  Extrapolating that estimate across the 50 year life of the structure, adjusting for inflation, then discounting the estimate back to current dollars provides an estimate of almost $36 billion in expected residential losses from tornadoes for Oklahoma.[6]  If all homes were built to the new standard, a reduction in damage of $11 billion can be expected. 

For the new code to be justified, the increased cost of construction must be less than $11 billion.  To get an estimate of the overall cost of the new code, we need to know the average size of homes in Oklahoma and the current number of homes.  Census[7] and Zillow[8] provide data indicating that the average sized home in Oklahoma is 2,000 square feet and there are currently 1.67 million homes.  This means that if every home in the state had been built to the new code, the state would have increased construction cost by $3.3 billion.  But this increased cost is lower than the estimate of reduced damages by a factor of more than 3 to 1.  So the decision to change the building code in Moore appears to be a good decision and one that should be considered for adoption by the entire state of Oklahoma.

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[1] Swiss RE, (2014), “Natural Catastrophes and Man Made Disasters in 2013”, Sigma, No. 1, 2013.

[2] Hampton, Joy (2014), “Moore city council considers storm-resistant building code upgrades, Norman Transcript, March 17, 2014.  Available online at:  http://www.normantranscript.com/headlines/x1387868847/Moore-City-council-considers-storm-resistant-building-code-upgrades?zc_p=0

[3] Estimate based on damage estimates from the Storm Prediction Tornado archive which can be found at:  www.spc.noaa.gov/wcm

[4] Ramsdell, J. V., and Rishel, J. P., (2007), Tornado climatology of the contiguous United States, Tech. Rep. NUREG/CR-4461, Nuclear Regulatory Commission, Washington, D. C.

[5] Estimate comes from state level data provided by the Oklahoma Department of Insurance and national data provided by the Insurance Information Institute.

[6] Estimate uses a 2% inflation rate and a discount rate of 2.5% based on the yield of the 10 year U.S. Treasury Notes.

[7] Census (2012), Selected Housing Characteristics, American Community Survey, 2012 5 year estimates,  American Fact Finder, available online at:  http://factfinder2.census.gov/faces/nav/jsf/pages/searchresults.xhtml?refresh=t

[8] Zillow Real Estate (2014), available online at:  http://www.zillow.com/ok/home-values/

Better Construction Matters!

Later this summer, a journal article Jeff Czajkowski of Wharton and I co-authored will appear in Land Economics.  But a shorter version of the research was published last week in Visualize, an insurance industry publication.  The link to the article is here:

Role of Building Codes in Reducing Natural Disaster Property Losses

We were interested to see if better enforcement of building codes could translate into lower damage when a hazard strikes a community.  The hazard we studied was hail, which is one of the costliest hazards for insured losses.  To determine the degree to which building codes were enforced we used the Building Code Effectiveness Grading Schedule (BCEGS) which is administered by the Insurance Services Office (ISO).  Damage data came from two sources, industry level damage from ISO and exposure level damage from Travelers Insurance.  We found that the difference in insured losses between communities with the higher ratings and those with no rating was a reduction in losses of about 20%.   

Building a House of Straw when a Wolf is in the Neighborhood

The Little Rock office of the National Weather Service has released some information on the damage survey conducted after the tornadoes of April 27.  The disturbing finding is that many of the homes suffering the worst damage did not have the exterior walls anchored to the foundation properly.  Anchor bolts are L or J shaped bolts inserted into the foundation before it cures leaving a threaded portion allowing the contractor to bolt the baseplate to the foundation.  Instead the baseplate of some of the homes were attached simply with cut nails.  Their summary can found here:

http://www.srh.noaa.gov/lzk/?n=anchor0514.htm

It may be faster and slightly cheaper to fasten the exterior walls without the anchor bolts but the cost and time saved makes little sense.   I checked prices for anchor bolts online and found that, when purchased in bulk the cost is less than $1.00 each for an 8 inch L shaped bolt with a diameter of ½ inch.  Spaced at 2 foot intervals, the material cost of a 2500 square foot house would increase by less than $100.  The American approach to production has been make it faster and make it cheaper.  That may be fine if the product in question is one that is largely disposable.  But if you are building a residential structure that may encounter a wind storm it seems to me that it is incumbent on the community and on the contractors to ensure that it will perform better than this.

It should not be expected that all residential homes have the capacity to survive a direct hit by an EF-5 tornado.  But the path of most EF-5 tornadoes only reach that strength for a small part of the path itself, meaning that many structures will only be exposed to winds in the lower level of the Enhanced Fujita scale.  Better construction will mean that the residents of those homes have a higher chance of survival and overall, the damage from the storm will be less.

A tension exists between providing affordable housing versus requiring that all homes be built to anticipate any possible hazard.  Communities want developers to choose their town for the next development and if lax standards make development more likely it’s tempting to water down the requirements.  But the cost differential on this one element can’t possibly be justified.

Tragedy Visits Again

Once again a storm roared through the country’s mid-section dropping powerful tornadoes that destroyed communities leaving grief and sorrow for the families and friends of the storms victims.  I’ve witnessed this scene many times both by living in Tornado Alley but more recently from the research I do.  The question that pops up in the aftermath is almost always the same, “What can be done?”

The morning after the Arkansas tornadoes I was watching the morning news shows and as the networks were covering the event I watched a reporter pick up a piece of debris and claim that these homes were well constructed, they were clad with brick.  I’m not an engineer but I work alongside them and I can testify that a home clad with brick is not necessarily an indication of strong construction.  The strength required to withstand tornadic winds comes from features that lie behind the brick and can’t usually be seen from the outside.  It involves how the various components of the home, foundation, walls and roof are tied together, what engineers call a “continuous load path”.  If the connections between the roof and the wall are weak, the roof will fail causing a failure of the walls as well, regardless of what material it is clad with.  Decisions to include these features must be done when the homes are first constructed.  Which brings up a second question, “Should these features be required by building codes?”

That question cannot be answered easily.  First, the most important element when thinking about tornadoes is preserving life and avoiding injuries.  The best advice, when confronted with an imminent tornado is to go to a central part of the structure and put as many walls between you and the tornado as possible.  If you have a shelter, use it!  And don’t get in a car and leave your home unless you live in a very vulnerable structure and have a safe place to go to quickly.  Tornadoes and cars are a deadly combination.  But beyond the issue of life safety, there is a secondary discussion of how to minimize the damage from tornadoes and this is where enhanced building codes come into the conversation.  For this question, as in most public policy debates, we must examine the costs of better construction to the expected benefits.

The key elements of the “continuous load path” are anchoring the exterior walls to the foundation and solid connections (hurricane straps) between the roof structure and the exterior walls.  Stiffening the exterior walls with stronger sheathing further increases the ability of the wall to resist the stress from the wind pressure and using a reinforced garage door reduces the probability of it failing which can cause a cascade of structural failures.  These changes cost money and if we ask all homes to be built in this way, the overall cost to society is large.  But as urban areas expand the chances of multi-billion dollar storms increases so it may be cost effective in some areas.  Oklahoma has experienced over $5 billion in tornado and wind storm damage since 1996.  The damage data I’m using here is found in the Storm Prediction Center’s tornado archive which comes with a caveat, that the damage data is not very reliable.  The true amount of the damage is likely above that amount.  So what would these added construction features add to the cost of a home?  It depends on who you ask but the material cost for the anchors and the roof/wall connections is small.  Better sheathing adds some cost but the home must be sheathed with something so it’s just a question of the added cost of better materials.  The largest component would be the reinforced garage door.

If the mitigation had increased the construction costs by $2,000 per home, total costs to the state of Oklahoma would have been about $2.4 billion for all permanent homes in the state.  And if these features would have resulted in a 30% reduction in damage, using the SPC damage figures, the damage over the last 18 years would have been $1.7 billion.  Not enough to cross the benefit/cost threshold.  But homes are an investment that will be on the plains of Oklahoma for more than 18 years.  So we need to adjust our analysis to a longer time frame.  Plus we need a better assessment of the actual damage than the SPC archive.  There is some evidence that the actual damage is much more than shown on the archive.  If it’s off by 40% then actual damages experience are closer to $8 billion meaning that a 30% reduction in damages is now $2.4 billion.  As a side note, the SPC archive has total damages from tornadoes in 2011 at less than $10 billion whereas the National Climatic Data Center has it at over $20 billion.

There is also empirical evidence that home buyers are willing to pay more for better construction.  To study this question economists use models that parse out the effect on the selling price of homes feature by feature.  These models are called hedonic pricing models and studies conducted in areas vulnerable to natural hazards show that selling price goes up when hazard mitigation features are present.

Better structures will not ensure that casualties will be eliminated but it’s reasonable to assume that if we can built better homes, those residing in the homes are more likely to escape harm or at least minimize the injuries and suffering that inevitably follow in the wake of nature’s most powerful storm.  And if we reduce the monetary damages in the process, well that’s just a bonus.

  

The Dallas Morning News ran an op-ed I wrote about where to spend tornado safety funds.  The most tragic element of last week’s tornado in Moore was that an EF-5 tornado, an extremely rare event, hit two elementary schools with full force.  Few structures are designed for that type of stress but engineered buildings would be about the best choice you could have.  Most residential structures would be leveled.

The public policy question here is what, if anything, can we do to minimize casualties?  And how should we fund those efforts?  Currently, FEMA and the state of Oklahoma has a program to pay for most of the costs to engineer saferooms in new Oklahoma schools which would provide protection from even the largest tornado.  Currently, only 100 schools in Oklahoma have received this funding and regrettably, Plaza Towers Elementary in Moore was not one of those.  If you consider that Oklahoma has 1,780 campuses and estimates to provide a safe room run from $500,000 to $1,000,000 per campus, the outlay to protect all schools would be immense, $1 to $2 billion dollars.  FEMA’s HazardMitigation Grant Program (HMGP) provides grant money to areas declared by the President of the United States to be disaster areas.  This designation releases money that can be used by residents to install a FEMA approved safe room or communities to designate for other mitigation uses like sheltering options for mobile home parks.  The most recent iteration of this program in Oklahoma was so oversubscribed that grantees were determined by lottery.

In general, my research suggests that using public money to save lives from tornado fatalities fails the benchmark that spending is considered reasonable if the cost per avoided fatality is less than $10 million.  In our book Economic andSocietal Impacts of Tornadoes and the follow up to that book DeadlySeason:  An Analysis of the 2011 TornadoOutbreak, Dan Sutter and I show that these programs are well outside that benchmark for most uses of the program.  Using the funds to reduce fatalities in mobile homes is the one exception for some states.

These events define tragedy and emotions run high, as they should.  My suggestion as we go forward to implement these programs would be as follows:  1)  For school districts, instead of outright grants, use Federal money to provide the financing at 0% interest to cover the additional costs in new schools to provide a safe room.  For existing schools who wish to modify campuses to provide a safe room, provide financing at 0% interest as well.  Each district and its residents must decide whether or not this expenditure is the optimal use of limited funds, but for those that do, make it possible by providing the money at no interest.  2)  Grants for use in residential housing should be strictly limited to the most vulnerable structures, mobile homes, or to low income families.  The HMGP currently addresses this by providing a higher percentage of the safe room covered by the grant, from 75% to 90%.  But, again, funds are very limited and it seems to me that more affluent families should be able to make the choice to build a safe room without help (see my previous post on the safe room my wife and I installed) and that if we do anything, it should be directed at the most vulnerable structures.

I was interviewed on Bloomberg Friday.  The video link is here.  One of the questions was about saferooms and given the horrible tornado in Moore last week it is an important topic.  I live in North Texas and have seen my share of tornadoes.  Surviving one depends on many factors but the most important are the size of the storm, the amount of time you have to prepare and the type of structure you are in when the storm hits.  A well-built engineered structure is the safest.  The worst is a mobile home.

Permanent homes provide reasonable shelter from small tornadoes and with modest enhancements in construction can also provide reasonable shelter from many strong storms.  That would account for almost 98% of all tornadoes (EF0-EF2).  The Insurance Institute for Business and Home Safety suggests building homes to meet their Fortified Home Program.   Some communities are adopting aspects of the program in their building codes.  Moore OK, is one of those.  But that would not apply to homes built prior to the enactment of enhanced codes.

For residents of permanent homes to get protection from violent tornadoes some type of shelter is required, in residence or underground, and the options for those are growing every year.  We recently converted our hall closet to a shelter.  Retrofitting an existing structure is not ideal and if an EF-5 tornado took a direct hit on our house, it’s not a sure bet we would survive.  But since 1950, there have only been 59 EF-5 tornadoes, including the one last week, out of more than 60,000 tornadoes.  So we are talking about an extremely rare event.  And also remember that to receive the EF-5 rating, the tornado does not have to exhibit EF-5 winds for the entire path.  The tornado that hit Joplin 2 years ago was rated EF-5 but that rating applied to about 6 miles of the 21 mile path.  The tragedy there, like the tragedy in Moore is that the strongest winds occurred over a populated area.

The public policy question is whether or not we should require the installation of shelters by homeowners.  They do add a significant cost to the price of a home.  Some homeowners, myself included, are willing to pay the added cost but I’m not sure that most people would, even those that live in tornado alley.  A second policy option is to offer a subsidy to homeowners for a shelter.  Dan Sutter and I have written extensively about this.  This is a very expensive program and will reduce fatalities but at a higher cost than programs to reduce casualties from other risks we face.  Oklahoma has such a program but the recipients are decided by a lottery.  My state, Texas, has a similar program and we live in a county that participates in it.  But I feel strongly enough about this that I did not apply for the subsidy.  (That was a popular decision in my house.)  If public money is to be used in this way, it should go to vulnerable structures like mobile homes.  And if it is decided that public money will be used to subsidize the installation of shelters in permanent homes, it should be means tested so that people with the income to bear the cost are not receiving the subsidy at the expense of those who cannot.

A Very Sad Day

Once again we are reminded of the violent nature of tornadoes.  Tornadoes are not rare but a violent tornado (EF-4 or EF-5) hitting a populated area will, more often than not, mean tragedy.  This one is personal for me.  My family lived in OKC from 1999 through 2003.  We were a part of the OKC community for the May 3, 1999 tornado and the May 2003 tornado.  Our son and his family still live there.  So there is a visceral feeling as I watch the images of the unfolding event and the tragic aftermath.

Casualties

At this moment, the OKC Medical Examiner says there are 51 fatalities but no one will be surprised if that number rises.  Some news outlets are reporting fatalities that approach 100.  That is larger than the 1999 tornado.  In fact, you have to go back to the 1947 Woodward tornado to exceed the number of fatalities from this storm.  Injury numbers have not been released but it is likely that the number of injuries will be over 1000.

Damage

I’m often asked about damage the day after an event has occurred.  At this point, only broad guesses are possible but if you consider the 1999 tornado as a guide, the damages will be in the billions.  That tornado created damage of $1 billion and adjusted for inflation that number would be about $1.5 billion.  I would consider that a good guess for a lower end for estimated damage.  The Joplin tornado two years ago suffered $3 billion in damages.

As the days unfold, people will form opinions about this event.  There are three storylines that I expect will dominate the coverage and I’d like to address those.

First and foremost this is the story of a violent tornado in an urban area.  As more and more people move into areas vulnerable to tornadoes, the population density rises.  Tornadoes are a normal part of life in the plains and sometimes the atmospheric conditions are conducive to creating a monster storm.  If that storm races across an open field, it’s an interesting event to watch, from a safe distance.  But if that storm strikes a populated area, buildings will be destroyed and people will suffer injuries and regrettably some will perish.  Urban sprawl is not going away so the job of researchers is to search for ways to minimize those casualties.

 This is the fourth violent killer tornado to hit Moore in the last 15 years.  The tempting storyline is to ask, “What is unique about Moore?”.  But the question pre-supposes that tornadoes return to paths they visited in the past.  It certainly appears that way.  Several times in the last few hours I have seen the path of the 1999 storm overlaid with the path of this one.  I’m surprised that the 2003 path has not been on the same graphic as it also had a similar path through Moore.  Harold Brooks did a very good job in attempting to dispel this analysis when he was interviewed on MSNBC.  He pointed out that central Oklahoma is located where the warm, moist air from the Gulf collides with the cool dry air coming off the Rockies and that this confluence provides the necessary ingredients for violent tornadoes.  Any community in central Oklahoma has the same chance of witnessing a violent tornado.  In 2011, an EF-5 tornado hit El Reno which is located northwest of the OKC metro area.  Fewer people were killed simply due to the lower population density.

The final storyline that I expect will be discussed deals with the two schools tragically hit by this tornado.  Briarwood Elementary and Plaza Tower Elementary are about a mile apart and both were in the path of the storm.  As of this writing there are no fatalities at Briarwood and many from Plaza Tower.  Why?  This is an important area of inquiry and the reasons are likely complex.  It could be engineering.  Was one school built differently from the other?  It could be storm intensity.  Along a tornadoes path, the intensity will vary.  A small change in intensity can have different effects on buildings and it could be that the change in intensity was sufficient to create very different outcomes on buildings so close to each other.  It could be location.  The path of the storm is estimated to be a mile wide.  But wind intensities vary within the path with the strongest winds toward the center.  Or it could be tragic luck.  Where in the building were the children when struck by the storm?

Tornadoes are both fascinating and terrifying events.  I have lived in this part of the country all my life and have developed a respect for the power of nature.  It is my hope and prayer that the victims of this tragedy find the help that they need as they put the pieces of their lives back together.

Dan Sutter and I have a new book released this week from AMS Books and the University of Chicago Press.  You can order the book from AMS Books at:

Deadly Season: Analysis of the 2011 Tornado Outbreaks

A Tornado Visits My Hometown

I’m an economist who studies natural hazards.  Over the last few years, tornadoes have dominated that research agenda.  It’s a fascinating topic for social scientists and most of the time I can separate the emotions of a horrifying event allowing me to conduct dispassionate analysis.  But yesterday the research came home.  Both my wife and I went to high school in Arlington, Texas.  Most people know Arlington as the home of the Texas Rangers, Six Flags and now the Dallas Cowboys.  But for those of us who were raised there, it’s home like any town is home.  We know the streets, not as markers on a map but places in our lives.  We remember when the mall was an open field as well as the name of the local college before it was subsumed into one of the state university systems.  As I was watching TV coverage of the tornadoes, it became clear that my home town had been struck by the very monster I have spent the last 10 years studying.  It’s not the first tornado to hit Arlington, or the DFW metroplex, for that matter, but it was the first time since the incredible and horrifying death toll from last year’s tornado season.  It also happened as the National Weather Service is conducting an effort, known as Weather Ready Nation, to help prepare for future outbreaks.  I’ve been involved in that effort and I have no doubt that yesterday’s outbreak will become one of the talking points.  The main point for the researcher in me is that a tornado outbreak hit a major population area and as of now, there are no fatalities.  Over 6 million people live in the Dallas/Ft. Worth metropolitan area.  By some estimates somewhere between 6 and 12 tornadoes touched down, some large enough to send 5 ton tractor trailers into the air like match sticks.  Significant to major damage occurred in Kennedale, Arlington, Lancaster and Forney, all suburbs on the southern and eastern side of the DFW metroplex but across a 50 mile swath.  This is the nightmare scenario that keeps forecasters and emergency managers up at night.  And when the previous season saw death tolls in the hundreds, it brings a keen focus to bear.  Teams of engineers will descend on my home town in the ensuing days to assess the storm path and damage.  They should talk to Dale Stubblefield, who went to high school with my wife and me.  He posted an eye witness account on Facebook with a description of the path, the damage he witnessed but most importantly the speed with which the neighborhood began the process of recovery.

“The damage to the neighborhood is heart breaking. We were lucky and had minor damage, a broken window, some roof damage, we lost a tree and our fence. Our neighborhood got nailed. The tornado crossed 287 at Sublett, turned north and passed Corey Elementry creating havoc. It crossed I-20 and blew up homes as it headed to St. Barnabus Church up on the hill. The pre-school was in session with over 85 kids as the storm ripped off the roof of the chuch education building and then ripped though my neighborhood before hitting a nursing home on Green Oaks. 

Help was immediate. The Martin HS football team came in by the truckloads and started stacking fence panels, moving brush and helping a family move their valuables out of their home. Members of St. Barnabus, even though their church had been heavily damaged brought food and drinks to those working to secure homes. Wow - what a day.”  

More Thoughts on the Tornado Outbreak of 2011

I've just completed  participating in a conference sponsored by the Geneva Association where I presented my thoughts on this years tornadoes.  In preparing for the presentation, I used our casualty models to see if this year suffered from any of the vulnerabilities we had identified that will inflate fatalities.  The answer to that question is yes.  Compared to previous outbreaks, this one occurred predominantly in the southeast which has the highest fatality rate from tornadoes than any other region.  As an example, the fatality rate for the US is .45 per million calculated using data from 1950-2010.  Mississippi has a fatality rate of 2.8, six times the US average.  Secondly, there is a greater proportion of mobile homes than previous outbreaks.  As a comparison, consider the tornadoes of 1953, the last year we suffered more than 500 deaths.  For the counties affected by those tornadoes, the percentage of mobile homes in the housing stock was 6 tenths of one percent.  It was 10 percent for the counties affected by this years tornadoes.  Our research confirms the observation that you are 10 times more likely to die in a mobile home struck by a tornado than a permanent home.  As more mobile homes are in the path of the tornado, higher casualties will likely follow.  Finally, one third of this years fatalities occurred on a weekend including the tornado in Joplin.  We have found that casualties are significantly higher on either Saturday or Sunday than during the week.  People are safer in the buildings they work or go to school in than they are in their own homes.  I used our casualty model to estimate the change in fatalities for the Joplin tornado if it had occurred on a Monday rather than a Sunday and found the expected fatalities would have been reduced by 23%.

So it's no wonder that we have now exceeded the largest annual death toll since records were kept beginning in 1950.  Or is it that simple?  I also spoke at the AMS Broadcast Meteorology Conference last month.  Some of the comments I heard from people expressed shock at the casualties but also questioning the value of the warnings that have been celebrated for minimizing casualties.  That started me thinking about how I could test whether or not the warnings were effective.  Keep in mind that the Joplin tornado had 24 minutes lead time.  One way to examine this notion is to compare the fatality rate from this years tornadoes with another outbreak.  Again, consider 1953 which had a similar number of killer tornadoes, 41 versus 56 this year, had a similar number of affected counties, 72 versus 75 this year, a similar percent of F-3 plus tornadoes, 78% versus 79% this year, and a similar number of fatalities, 519 versus 537 this year.  The population of the affected counties in 1953 was 3.9 million giving that outbreak a fatality rate of 167 per million.  Affected counties in this years tornadoes is 8.2 million giving this year a fatality rate of 35 per million, half the rate of  1953.  Can the entire difference be attributed to better warnings?  No, I don't believe so, but it is clear that something profound has changed in the last 60 years and the obvious candidate is the investment we have made in our warning system as well as the enhancement in communication technology that we enjoy today.

There is no argument that we have experienced a terrible tragedy.  But it's my belief that the death toll could have much higher if not for the investment by and the efforts of the National Weather Service and the forecasters that have trained to warn residents of the danger of approaching tornadoes.

How Could This Happen?

            April of 1974 was a very special month for me.  I met, then asked to my senior prom the young woman who has now been my wife of 33 years.  But April of 1974 has a tragic history for it was on April 3, 1974 that hundreds of people died in what was one of the worst days for tornado fatalities.  Since that time, Doppler radar was installed and increased dramatically the accuracy and timeliness of tornado warnings.  Communication technology has improved beyond anything we imagined in the 1970’s and this has allowed warnings to be disseminated quickly and to virtually anyone with a TV, radio, computer or even cell phone.  As a result, casualties from tornadoes have dropped to an annual average of about 60.  Not until April of this year have we witnessed any tornado event which killed more than 100 people.  So it’s not surprising that we are shocked when we see the death tolls from the tornadoes of the last 6 weeks.  For the first time since 1953 we have exceeded 500 fatalities and by the time this season is over, we may top that total of 519.

            Some are asking if we had bad warnings for these storms.  The answer to that question is a resounding no.  Joplin had over 20 minutes of warning and the same has been true for each of the horrific events that our country has endured.  In fact, a good argument can be made that without our current warning technology and the expertise of our forecasters, the death toll would have much, much higher.  It is true that an EF-5 tornado which makes a direct hit on a home is going to kill and injure anyone inside regardless of the lead time these unfortunate souls had before it struck.  But keep in mind, that not all of the tornadoes we have experienced have been that strong and even the ones that were, may not have been that strong for the life span of the tornado. 

            So how could this happen?  Is it climate change or just bad luck?  I am not a climate scientist, so I will leave that question for more qualified researchers.  But I do have some insight into why this year has been one that we will likely never forget.  First, it has been almost 50 years since we have seen an outbreak of this magnitude.  And over that time we have come to believe that outbreaks of this size are so rare that we just don’t consider that they could happen in our lifetime.  But, 50 years is a blink of an eye to Mother Nature.  Our records and oral history only go back a few hundred years at best.  The Midwest was not aggressively settled until the latter part of the 19^th century so our experience with tornadoes is limited.

            Secondly, we have increased the population in vulnerable areas dramatically.  Land that was once uninhabited is now crammed with subdivisions.  When my wife and I attended the prom in 1974 the Dallas/Ft. Worth area consisted of 2 counties, Dallas and Tarrant.  It now stretches across 10 counties with a population of about 6 million.  The same can be said for Oklahoma City, Kansas City, Little Rock and other metropolitan areas in “Tornado Alley”.

            Finally, part of the reason is truly nothing more than bad luck.  Even with the increased population, there are still vast areas of rural land.  An EF-5 tornado that plows through a corn field kills nothing more than the fruits of a farmer’s labor.  A financial blow but not a human tragedy.  Tornadoes go where they do and if they cross human settlement, bad things are going to happen.  It is not the act of an angry god but the unfortunate consequence of living with a sometimes violent environment.   

Tornadoes in Oklahoma

Once again, central Oklahoma is the bull’s-eye for an outbreak of killer tornadoes. I have more than a professional interest any time a tornado passes through Oklahoma having spent 4 years living and working there. Additionally, our son still lives in Oklahoma City, so any time we hear of severe weather in that region, it catches our attention. Preliminary reports are that 5 people lost their lives and another 10 are in area hospitals with severe injuries. The death toll may rise of course, but it could have been a lot worse. Tornadoes are common there and most people have had experience with them and know what to do. One anecdote from this event reported on CNN.com illustrates that. The tornado struck a large truck stop on Interstate 40 east of OKC. Workers rushed everyone in the building into the safest room they had, the cooler. Travelers also sought shelter at the truck stop in one of the coolers or the restrooms. The tornado struck the truck stop ripping off the roof and overturning tractor trailers but no one was killed at this location.

My research with Dan Sutter on tornadoes reveals that had this event happened overnight, the death toll would have been much higher. Even a well warned tornado, can be overlooked by residents simply because they were not awake to hear the warning. Additionally, after the sun goes down, tornadoes are difficult to see and even when a warning has been given, some residents want to visually confirm the warning for themselves before they heed the warning. Just to give a sense of the value of tornado warnings, Harold Brooks and Chuck Doswell of the National Severe Storms Laboratory estimate that prior to the National Weather Service issuing tornado warnings the fatality rate from these storms was 1.8 per million. Today it is .11. This suggests that fatalities, without our current warning system could be more than 16 times higher than they were today. So instead of 5 fatalities we could be looking at the potential of having almost 100 from this event. Tornadoes are scary partly because of the power they posses but also because of their unpredictable nature. But, we are fortunate to have a dedicated, professional staff of forecasters who provide valuable warnings and do indeed save lives.

You Can't Fight Mother Nature

It is perhaps ironic, but a researcher in natural hazards, finds himself at the mercy of a natural hazard.  I am talking about the Iceland Volcano, which has not had any fatalities, but may prove fatal to some businesses in Europe, most notably, airlines and the travel industy.  Today is the fifth day of closed airspace over Europe.  I was supposed to be presenting research in Munich on Friday, travel to Bratislava for a Fulbright Lecture, then take the night train from Vienna to Zurich for another conference.  Well, let's just say that plans have changed, at least somewhat.  Munich and Bratislava were cancelled but I do plan to make it to Zurich, but by train, from Oslo.

This event is certainly a lesson for modern society.  The disruption in air travel has created absolute chaos in a number of areas.  Passenger travel is the obvious one, but for many there are alternatives, like my changing to a train, which is easy to do in Europe.  But there are other areas that will be hurt as well.  Delivery of goods, particularly perishable goods are in real trouble.  It has been very easy for urban areas to have fresh fruits and vegetables available year round.  We simply had them flown from warmer regions with lower labor costs.  But, without air service, that produce will rot in warehouses.  An event like this reminds us of how vulnerable that delivery system is.  The airline industry in Europe was in a precarious state to begin with.  For some airlines, the loss of business could be the last straw.  My cancelled flight was on SAS.  SAS announced that if the disruption continued into this week, which it has, they would begin laying off 2500 workers.  BBC is reporting that as an industry, airlines are losing $200 million a day.  This is day five, so that would make the costs to the airlines at $1 billion.  But, it occurs to me that a bigger concern to the airlines could be the realization on the part of travelers of the inherent uncertainty of flying.  The last time this volcano erupted was in 1821 and it erupted on and off for almost 2 years.  As travelers take this into consideration when making their plans, will it cause them to consider alternatives, like ferries and the train?  Will it cause travelers from other continents, like North America to stay home rather than taking the risk of being stuck across an ocean from home?  The last thing the European economy needs now is a reduction in tourism.  Greece is perilously close to defaulting on their sovereign debt, while Portugal and Spain are not far behind.  Our world is inter-connected in ways that are not obvious until something like this happens.

Bottom line, you can't fight Mother Nature.

Landslides

     

The project I am developing while in Norway deals with the socio-economic consequences of landslides.  Most of my work, up until now, has focused on wind hazards, tornadoes and hurricanes.  Before my arrival in Norway, Uganda suffered serious damage and fatalities from a landslide and just yesterday 95 souls were lost in the mudslides that occurred in Brazil.

In the US, the US Geological Survey estimates that in an average year 1 to 2 billion dollars worth of damage are attributed to landslides and over 25 lives are lost.  This is damage and casualty totals similar to tornadoes, yet landslides do not receive the same amount of attention in the media.  My project will merge data on landslides and some of the precipitating events such as thunderstorms and wildfires with demographic data to attempt to create a damage profile of this hazard.  The data on landslides has been obtained from a hazard database maintained by the University of South Carolina called SHELDUS¹.  My thanks to Susan Cutter and her colleagues in compiling this data for researchers to use.

Before I left for Norway, I was interviewed for a short syndicated television segment on tornado warnings.  The first station to pick it up is WCPO in Kentucky.  Here is the link:

Tornado Warnings

This week I will be presenting my research to the Economics Department at the University of Gothenburg, in Gothenburg, Sweden.

¹Hazards & Vulnerability Research Institute (2009). The Spatial Hazard Events and Losses Database for the United States, Version 7.0 [Online Database]. Columbia, SC: University of South Carolina. Available from http://www.sheldus.org "


Landslide Photographs are provided by the International Centre for Geohazards, a research centre of the Norwegian Geotechnical Institute.

Hazard Mitigation

Becoming an academic is a second career for me after spending 17 years in the corporate world.  I knew little about what kind of research I would pursue.  My only inclination was that it would likely be somehow related to my corporate experience which was working in various capacities for an electric utility.  Providence was kind, however, and I was at the right place and the right time to begin a research agenda in a very new, and sparcely populated arena.  While still in grad school, I was asked if an economist can contribute anything to the issues of wind related hazards.  This invitation came from engineers, who knew little about market effects or how people may respond to risk, but not knowing any better, I jumped at the chance.  My first project is still one of favorite topics and that is the valuation of hazard mitigation.  First, what do we mean by mitigation?  Think of the story you learned as a child about the three little pigs.  One built his house out of straw, the second built his house out of sticks and the third took the time, energy and no doubt money, to build his house out of bricks.  Not surprisingly, the day comes that the big bad wolf is looking for dinner and has no trouble destroying the homes of the first two pigs.  The home of the third pig is a different story.  It was built to withstand the possibility of enduring an attack by the wolf. 

The metaphor can be applied to so many things in life but to me, it has a direct lesson for hazard mitigation.  Mitigation simply put is what you do before the hazard arrives to protect or mitigate the damage.  If you ask an engineer if he can build a home that can take anything the wolf has to dish out, most of them will answer in the affirmative.  But the economist asks if the mitigation is something that people (the market) actually want.  For many years, the assumption among professionals in natural hazards has been no.  The prevailing wisdom was that people simply ignore the potential of disaster and behave as the first 2 pigs in our story.  How can we test that hypothesis?  Simply asking people is one way but it has the disadvantage of receiving answers that may not hold up if the same people are required to purchase the mitigation.  I have been involved in several studies that look at the question a different way.  Do residential homes which contain features that mitigate against the hazards in this region, sell for a different price than homes which do not?  In other words, is there a market premium for homes which would be more like the brick home of our story?  As it turns out, the answer is yes!  We have conducted studies in markets which would be exposed to hurricanes and markets that would be exposed to tornadoes and in both cases, there is a positive and significant increase in the sales price of a home which contain features that would mitigate the damage from an eventual disaster.  This is not to say that everyone who moves into that community feels compelled to purchase mitigation.  But, enough do that it is reflected in the sales prices of real estate in those communities.

This has quite a bit to say about public policy in dealing with natural hazards.  If you really believe that people are not going to do what is best to protect them from the hazard, the only option to protect the public is to undertake policies which require or force them to do so.  But, if there is a market for mitigation, the options for policy makers are increased rather dramatically.  Now, we can entertain the idea of providing market incentives which would be voluntary.  In other words, we can nudge the market rather than replacing it. 

My time in Norway has so far been a wonderful experience.  Last week I presented some of my research on tornadoes to the Norwegian School for Life Sciences.  This week I travel to Brussels to meet with the staff at the Centre for Research in the Epidemiology of Disasters.  They maintain a large database, EM-DAT, on disasters which is used by researchers all over the world.

Norwegian Geotechnical Institute

My sabbatical is being spent with the International Centre for Geohazards which is a unit of the Norwegian Geotechnical Institute in Oslo. ICG has been selected as a Centre of Excellence by the Research Council of Norway.  This is a unique organization, which participates in pan-European projects related to natural hazards.  There are only 2 full time employees of the Centre.  Most of the projects they conduct are done by visiting scholars, such as myself, and a small army of graduate students from all over the world.  NGI maintains several apartments in Oslo which are used by the visiting scholars and graduate students.  It surely made my transition easier since I did not have to find a place to live while I am here.

One of my first impressions is that it has the feel and energy of the graduate students who are here.  These young people, most of who are working on their dissertations, keep a certain level of excitement about their work that is infectious.  It reminds me of my grad school days and how everyone would anxiously talk about their projects to each other.  I do have to keep reminding myself that I am the “old guy” in the room. 

My project will be used to set some benchmarks for a pan-European project on landslides called Safeland.  It is funded by the European Commission and is a collaborative effort among many universities and institutes in Europe.  I am using data on US landslides from the database compiled by the University of South Carolina (SHELDUS) and am merging that data with demographic data in the hope that we can produce a “profile” of landslide damages.

Fulbright Program

It is quite an honor to be selected as a Fulbright Scholar and I am mindful of the role this program plays in international scholarly exchange.  Meeting some of the other “Fulbrighters” in Oslo is humbling.  These are amazing scholars who represent the US and their home institutions well.  I am fortunate to be a part of the current group of scholars. 

Last week was my first week in Oslo and most of it was spent in perfunctory chores; getting a bank account, resident permit, etc.  The bright spot was meeting the Fulbright staff here in Oslo.  Their energy and enthusiasm is infectious.  Prior to my arrival, I knew this was going to be a wonderful opportunity but the Fulbright staff has really made that expectation real.  Anyone considering application to the Fulbright program would do well to look at the opportunities in Norway.  Their web address is:

http://www.fulbright.no/

Economics of Natural Hazards

Natural hazards have fascinated and frightened us since earliest times.  From Noah’s flood to Pompeii’s volcano, natural disasters form a terrifying theme in ancient literature.  In modern times, scientists have dramatically increased their understanding of these events, while engineers have designed buildings and infrastructure that minimize the destructive effects of natural hazards.  It is only recently, however, that social scientists have begun to examine the impact these events have on society at large, as well as policies intended to lessen those effects.  Perhaps the most obvious “societal impact” is the economic costs of hazard events on individuals and institutions.  In the aggregate, these costs can be huge.  Hurricane Andrew caused 16 billion in insured losses and perhaps twice that amount in uninsured losses.  Thirteen years later, Hurricane Katrina, cost an estimated 34 billion in insured losses and over 200 billion in federal outlays not to mention the horrific number of casualties.  Economists are interested in finding ways to reduce the impacts of disasters, but also the effects these events have on labor, financial and other markets affected by community disruption.

My hope for this blog is that it fulfills two purposes.  First, I will serve as a Fulbright Scholar in Norway with the International Centre for Geohazards during Spring 2010 and the blog will give me a venue to chronicle this experience.  Secondly, I plan to continue the blog as my research on this topic evolves.