ESTIMATING THE BENEFITS OF CONSTRUCTION MEASURES TO MITIGATE EARTHQUAKE RISKS IN IRAN

Despite significant developments in technical aspects of construction measures in buildings to reduce earthquake risks, their widespread imp lementation in many communities has not occurred. One important factor is the additional cost of construction. The adoption of construction measures depends upon the utility households derive in relation to the ir costs. In this study we develop a subjective expected utility model of the household's decision process; and also employ a contingent val uation survey to assess the value to households of construction safety features in houses in Tehran and Rasht, Iran. The literature suggests that there are factors which detract from household expenditure to se lf-insurance, especially in mitigating earthquake risk. However, the r esults of this study show that, under certain conditions, households a re willing to pay a significant premium to ensure that earthquake safe ty construction features are incorporated into housing design.