Characterizing property damage uncertainty to extreme events using copulas with changing dependence

Music City Center 

Estimating probabilistic property damage from extreme storm events is crucial for assessing the vulnerability and risk to property and populations exposed to weather-related hazards. High-wind storm events may interact with exposed communities and infrastructure in urban and rural settings in intricate ways, making the dependence between hazard intensity and the expected losses challenging to determine. This complexity may differ across the spectrum of low to high values in the variable's domain, exhibiting distinct tail dependencies. This research employs copulas -a popular method for multivariate probability estimation- to address these intricate relationships. We examine various copula models to determine joint and conditional probabilities of property damage resulting from extreme wind events. Our study also investigates arbitrary upper and lower tail dependencies through a multivariate non-Gaussian correlation technique, applied to several Illinois' locations after merging storm events and property damage data from multiple sources for records consistency. Results demonstrate the importance of considering arbitrary tail dependence for probabilistic damage assessments.

Copulas

Extreme weather events

Property damage

non-Gaussian dependence

Tail dependence 

Section on Statistics and the Environment