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October 27, 2001 Patricia Grossi, P.E., Howard Kunreuther Today, due to the deterioration of existing U.S. infrastructure and the threat of damage from natural and man-made disasters, there is a need to upgrade existing lifeline systems and mitigate the damage from catastrophes. Traditionally, cost-benefit analysis (CBA) was employed to evaluate hazard mitigation for residential and commercial structures, but CBA also plays an important role in the evaluation of the mitigation measures for lifeline systems. In this brief paper, we characterize the unique nature of a CBA for lifelines, the challenges in utilizing CBA for lifeline mitigation, and its implications for public policy. We propose a five-step CBA process and suggest a framework to capture the societal benefits of mitigation, as well as the direct benefits of the measure to the owner of the lifeline. We illustrate the applicability of CBA to a water distribution system subject to earthquake hazard. More broadly, we propose a framework to link data from the physical and engineering sciences (i.e. risk quantification and vulnerability of the system) with the social sciences (i.e. costs of disasters and public policy implications of mitigation). In conclusion, we outline the challenges and potential advantages of implementing this framework.  grossi&kunreuther.pdf;
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