Value of Information on the Risk/Benefit of Infrastructure Exposed to Strong Winds in Mexico

Abstract

Valuable infrastructure is frequently damaged by strong hurricanes in Mexico obtaining, as a result, significant losses. In this paper, the ratio between these investments and the subsequent expected life-cycle costs is assessed. It is shown that the new information acquired to improve the wind hazard model helps to increase the protection to important infrastructure. The formulation is based on a comparison of the infra-structure expected life-cycle cost for 2 scenarios: with and without the new information on the maximum wind velocity. The probability distribution of this velocity is updated by fitting the enlarged database and the failure consequences include the business interruption after the infrastructure damage/failure.