b6025 wk5 assignment brilliant answers

 

Sometimes one’s choices may involve catastrophic  decisions and bear great risk and yet there can be no clear answer. For  example, if a person gets a divorce, shutters a plant, sells a losing  investment, or closes their business, will he or she be better off? The  following case incorporates nearly all of the material you have covered  this far and presents an example of one such choice where nearly all of  the alternatives have a significant downside risk.

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 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. Use proper spelling and grammar throughout, and  keep the text legible and balanced with visuals. Use the following file  naming convention: LastnameFirstInitial_M5_A1.doc.

By the due date assigned, deliver your assignment to the Submissions Area.

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