Tornado Damage Mitigation: Benefit–Cost Analysis of Enhanced Building Codes in Oklahoma

Abstract

Abstract In April 2014, the city of Moore, Oklahoma, adopted enhanced building codes designed for wind-resistant construction. This action came after Moore suffered three violent tornadoes in 14 yr. Insured loss data and a rigorous approach to estimating how much future damage can be mitigated is used to conduct a benefit–cost analysis of the Moore standards applied to the entire state of Oklahoma. The results show that the new codes easily pass the benefit–cost test for the state of Oklahoma by a factor of 3 to 1. Additionally, a sensitivity analysis is conducted on each of the five input variables to identify the threshold where each variable causes the benefit–cost test to fail. Variables include the estimate of future losses, percent of damage that can be reduced, added cost, residential share of overall losses, and the discount rate.