Review the following information from the article “A Cost-Benefit Analysis of the New Orleans Flood Protection System” by Stéphane Hallegatte (2005):

Question

Hallegatte, an environmentalist, assigns a probability (p) of a Katrina-like hurricane of 1/130 in his cost-benefit analysis for flood protection. However, the levees that protect New Orleans also put other regions at greater risk. You may assume the frequency of other floods is greater than Katrina-like events (Vastag & Rein, 2011).

The new levees that were built in response to Katrina cost approximately fourteen billion dollars (in 2010). This is in addition to the direct costs of Katrina (eighty-one billion dollars in 2005).

50 percent of New Orleans is at or below sea level.

A
100-year
event means that there is a 63 percent chance that such an event will occur within a 100-year period.

The following are the
interested (anchored and/or biased)
constituencies:

Residents of New Orleans—both those that can move and those who cannot move

Residents of the surrounding floodplains at risk from New Orleans levees

The Mayor of New Orleans

The federal government—specifically taxpayers and the Federal Emergency Management Agency (FEMA)

Assume that the availability heuristics make people more risk averse (populations drop, at least in the short term). Consider how this would affect the local economy.

You are an analyst at FEMA and are in charge of developing a recommendation for both the state and the local governments on whether or not to redevelop New Orleans.

Write a report with your recommendation. Address the following in your report:

Part A

Analyze the economics of New Orleans in light of the above parameters and develop your own Cost-Benefit Analysis (CBA) for rebuilding.

Evaluate the value of the CBA for each constituency and integrate these estimates into a scenario model and/or decision tree. Analyze the results.

Clearly each of these constituencies may both overlap and be prey to a variety of group dynamics internally. For one of these options, discuss the decision pitfalls to which they may be susceptible and make a recommendation on how to alleviate these pressures.

Starting with your CBA, estimate the relevant expected utility for the
interested constituencies.

Note:
You need not have absolute amounts but your relevant utilities should be proportional to one another.

Hint:
If you assume that your
total
CBA for New Orleans is fixed for each constituency (do not forget the overlaps), then each constituency will have a piece of the utility pie.

Part B

Make a case for or against rebuilding the city of New Orleans. This should be an executive summary; be concise and brief. Include exhibits.

Whether you are for or against, discuss how social heuristics could be used to your advantage, both ethically and unethically, in making your case. You may choose to fill the role of one of the constituents, if you prefer.

Write an 8–12-page report in Word format. Apply APA standards to citation of sources.
These are the readings that my professor provided to be for use in this assignment.
Hallegatte, S. (2006). A cost-benefit analysis of the New Orleans flood protection system.
Center for Environmental Sciences and Policy. Stanford University. Retrieved from

http://hal.cirad.fr/docs/00/16/46/28/PDF/Hallegatte_NewOrleans_CBA9.pdf

Vastag, B., & Rein, L. (2011, May 11). In Louisiana, a choice between two floods.
The
Washington Post. Retrieved from

http://www.washingtonpost.com/national/in-louisiana-a-choice-between-two-
floods/2011/05/11/AFrjFotG_story.html

David · Accepted Answer

RUNNING HEAD: NEW ORLEANS CASE 
 
New Orleans Case 
Student’s name 
Name of the Institute
NEW ORLEANS CASE 2
Contents 
Introduction ..................................................................................................................................................... 3 
Cost Benefit Analysis for Rebuilding New Orleans ............................................................................. 3 
Initial Cost Benefit Assessment: ........................................................................................................... 3 
Assumptions: ............................................................................................................................................... 3 
Analysis: ........................................................................................................................................................ 4 
Residents of New Orleans: ...................................................................................................................... 5 
Residents of surrounding Floodplains:.............................................................................................. 6 
The Mayor of New Orleans: .................................................................................................................... 7 
The Federal Government: ....................................................................................................................... 7 
Rebuilding the city of New Orleans .......................................................................................................... 9 
Costs of rebuilding: ................................................................................................................................... 9 
Benefits of Rebuilding .............................................................................................................................. 9 
References ....................................................................................................................................................... 11
NEW ORLEANS CASE 3
Introduction 
After the deadly landfall of the category 4 Hurricane Katrina on New Orleans, there 
has been active debate in the US for rebuilding New Orleans, which may consume lot of 
federal government investments. We are an analyst at FEMA and we have carried out CBA 
analysis of rebuilding New Orleans or not, and recommendations to local as well federal 
government. 
Cost Benefit Analysis for Rebuilding New Orleans 
Initial Cost Benefit Assessment:
We need to assess all the costs of rebuilding New Orleans C and compare it with all 
the benefits achieved in rebuilding it. Assessing all the costs related to rebuilding New 
Orleans is not a difficult task as compared to analyzing and assessing all the benefits. Since 
some of the benefits achieved are social and environmental, they are most difficult to 
quantify. In the very early stages of rebuilding, the officials have estimated overall costs of 
rebuilding to be $32 billion after a Hurricane strike like Katrina. But the benefits associated 
with it varies largely on parameters such as probability of occurrence of such flood like 
events, discounting rate considered, growth rate of the economy in consideration risk 
aversion and damage heterogeneity etc. If the costs of rebuilding New Orleans are lower than 
expected benefits than we should rebuild New Orleans otherwise we should not.  
Assumptions: 
 Probability of Katrina like hurricane is 1/130 whereas the levee that protects New 
Orleans is under danger more often than not and its probability is greater than Katrina 
like events. 
NEW ORLEANS CASE 4 
 The new levee that was built in response to Katrina cost approximately 14 billion 
dollar in addition to 81 billion direct costs.  
 50 per cent of New Orleans is at or below sea level which increases chances of 
disruptions to homes of the residents and large scale losses. 
 It has 63 per cent chances of such an event occurring in next 100 year period. 
 The major stakeholders of the area are residents of New Orleans and their 
neighborhood, the mayor and the federal government. 
Analysis: 
The total costs of rebuilding New Orleans can be estimated at about 95 billion dollars 
according to 2005 estimates or reconstructing city after Katrina strike. But the current level of 
costs of rebuilding the city will be much higher than that of 2005. We assume an inflation of 
3 per cent, which can be converted to total costs of 111 billion dollars.

Review the following information from the article “A Cost-Benefit Analysis of the New Orleans Flood Protection System” by Stéphane Hallegatte (2005): Hallegatte, an environmentalist, assigns a...

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