The economics of landslide mitigation strategies: public versus private decisions

Abstract

The economic rationale for public intervention in decisions regarding landslide hazard mitigation was examined through a cost-benefit analysis. A study area in Cincinnati, Ohio was used to test whether a public agency decision rule is suboptimal to a private decision rule in maximizing net benefits from landslide mitigation.

A 1985 U.S. Geological Survey (U.S.G.S.) report on landslide mitigation in Cincinnati, Ohio formed the basis for the cost-benefit analysis. Expected gross benefits from mitigation were determined by multiplying the probability of a landslide by an estimate of the property damages. A landslide probability model developed by the U.S.G.S. was tested against data for a study area in Pittsburgh, Pennsylvania. A Spearman rank correlation test, comparing actual and predicted landslide occurrence, indicated that the model is a good predictor and could be used to predict landslides in other areas of similar geology. Due to the poor quality of data on actual landslide damages, a regression equation was estimated to predict the actual damages resulting from a landslide in the Cincinnati study area.

A cost-benefit analysis was performed for the Cincinnati study area using three different approaches to measuring property damages. The results of the analysis support the hypothesis. In the most extreme case, annualized net benefits from mitigation are equal to $2.1 million under the private decision rule compared with only $1.6 million under the public agency decision rule.