Estimating Downtime in Loss Modeling

Abstract

Downtime includes the time necessary to plan, finance, and complete repairs on facilities damaged in earthquakes or other disasters. It is an essential component of loss modeling, because it is one measure of operational failure in lifelines and business interruption in buildings. Data from building repairs after the Loma Prieta and Northridge earthquakes, together with institutional risk management projections are used to define the rational and irrational components of downtime for buildings. Rational components include construction costs and time. Irrational situation-specific components take into account the time needed to mobilize for repairs and include financing, relocation of functions, workforce availability, regulatory changes, and economic uncertainty. To quantify these factors, the pace of recovery can be linked to the scale of damage in a stock of buildings in the affected region.