Decision Evaluation of Three Flood Management Strategies

This article describes the application of computational decision analytic techniques for a national policy decision. It constitutes an example of the increasing use of modern computational decision methods to assist in decision-making in society. An integrated flood catastrophe model is presented as well as some results of a case study made in the Upper Tisza region in north-eastern Hungary. Background data was provided through the Hungarian Academy of Sciences and complemented by interviews with different stakeholders in the region. Based upon these data, where a large degree of uncertainty is prevailing, we demonstrate how an implementation of a simulation and decision analytical model can provide insights into the effects of imposing different policy options for a flood risk management program in the region. We focus herein primarily on general options for designing a public/private insurance and reinsurance system for Hungary. It should, however, be emphasized that the main purpose of this article is not to provide any definite recommendations, but rather to present a methodology for handling a set of policy packages with the aim of gaining a consensus among stakeholders.