Estimation of expected annual damage, EAD

As an alternative to straightforward numerical integration of annual damage costs as function of either the return period or the exceedance probability, the expected annual damage, EAD, can be estimated analytically by using a log-linear model for the damage curve. With this model, it is found that it is important to assess the return period where damage begins as precisely as possible, and that the relative error in damage data gives rise to an error in EAD of the same order of magnitude. Moreover, the model allows for extrapolation above the largest return period for known damage costs. The precision of the EAD estimation is analysed in detail, and it is found that usual numerical integration over either the return period or the exceedance probability can give contradictory results, when only few data is available for the damage function. Using a piecewise log-linear damage function is show to be less sensitive to limited data availability. Finally, the necessary corrections when damage occurs below the 1-year return period are determined.