Framework for Connecting Forecast System Investments to the Economic and Societal Value of Forecast Improvements across Stakeholder Sectors

The primary goal of the project is to develop and demonstrate a value-of-information (VOI) framework — a multi-disciplinary assessment framework that connects forecast, decision, outcome, and economic valuation models — for estimating the economic benefits of investments in improved operational streamflow forecasts for select stakeholders. The framework is particularly intended to support CIROH’s objectives of applying state-of-the-practice decision science to enhance community resilience, by helping to guide investments toward forecast system enhancements that best support the decision needs of user-communities and that provide the largest societal benefits. The specific project objectives are to (1) identify specific decision contexts and stakeholder groups to serve as test-bed case study applications for assessing the value improved streamflow forecasts and (2) use the selected test-bed sites to develop, test, and demonstrate a VOI framework that can be more broadly applied and refined in other future applications.

To establish the state of the science and identify key knowledge gaps, the project includes an in-depth search and review of the literature assessing the economic benefits of flood forecasts in the US and other advanced economies, including applications of VOI methods. This review has identified a need for more empirical evidence and research in the US regarding the determinants, magnitude, and values associated with flood avoidance behaviors.

Building on these findings we have developed a conceptual model outlining the key components and steps required for conducting VOI analyses of streamflow forecasts. This framework describes how decision rules under uncertainty, outcome functions, and valuation functions are linked and can be evaluated assuming alternative (i.e., baseline and counterfactual) forecast scenarios, and it is demonstrated with simple flood forecast examples.

To identify use cases for applying the framework and to gather information about how river/flood forecasts are used in decisions made by emergency managers, other local officials, and residents of affected communities, we conducted a series of expert interviews, focusing on North Carolina and the Southeastern US. These interviews have included discussions with officials from FEMA, North Carolina Emergency Management, North Carolina Department of Transportation, City of Raleigh Stormwater Division, the Raleigh Weather Forecast Office, the City of Fayetteville. Based on these interviews and background research, we identified Fayetteville, NC as a case study site due to its extensive experience with both riverine and pluvial flooding, particularly during Hurricanes Florence and Matthew. Working with city officials, we have identified the most affected communities and are recruiting and scheduling interviews with residents to explore the extent and determinants of flood avoidance behaviors.