Human capital approach in the economic assessment of interventions for the reduction of seismic vulnerability in historic centres

Abstract

The economic evaluation of the interventions aimed at reducing the seismic risk in the historic centres starting from a minimum risk scenario established by law, namely that provided by the Emergency Limit Condition (ELC), and aimed at supporting efficient and effective choices by the public decision-maker pursuing objectives of equity and social well-being, displaying a multidimensional nature. As a result, the evaluation process should integrate more approaches to quantify the different forms of capital involved. The seismic event can pose risks to an individual’s survival or reduce the quality of life. The assessment of the effects of the potential seismic vulnerability reduction plan on the population can be determined on the basis of the value of a statistical life (VSL). Among the possible approaches for its determination, that of the human capital (HC) was chosen for use. A critical review of the HC approach literature has been instrumental in defining an empirical approach that integrates the income-based approach proposed by Jorgenson–Fraumeni for market and non-market assets as well as the approach of Dagum. On the basis of this, the value of the HC for the historic centre of Brisighella was determined. The empirical approach also supported the definition of a model for the quantification of the benefits produced on the population by the plan of interventions to reduce the seismic vulnerability of the historic centre.