Simplified Estimation of Economic Seismic Risk for Buildings

Abstract

A seismic risk assessment is often performed on behalf of a buyer of a commercial building in a seismically active region. One outcome of the assessment is that a probable maximum loss (PML) is computed. PML is of limited use to real-estate investors as it has no place in a standard financial analysis and reflects too long a planning period. We introduce an alternative to PML called probable frequent loss (PFL), which is defined as the mean loss resulting from shaking with 10% exceedance probability in 5 years. PFL is approximately related to expected annualized loss (EAL) through an economic hazard coefficient that can be tabulated or mapped. PFL and EAL offer three advantages over PML: (1) their planning period is meaningful to investors; (2) they can be used in financial analysis (making seismic risk a potential market force); and (3) rather than relying on expert opinion, one can estimate PFL and EAL using rigorous performance-based earthquake engineering (PBEE) principles, and yet produce a good approximation using a single linear structural analysis. We illustrate using 15 buildings, including a 7- story nonductile reinforced-concrete moment-frame building in Van Nuys, California, and 14 buildings from the CUREE-Caltech Woodframe Project.