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<br />VERSION 1.0 1/12/95 <br /> <br />B-C PROGRAM: Guidance <br /> <br />Exact Data <br />VS. Estimates <br /> <br />Data <br />Requirements <br /> <br />Despite the importance of accurate data input for benefit-cost analysis, <br />very few of the data inputs for benefit-cost analysis of hazard mitigation <br />projects will be exact numbers. However, if exact numbers are <br />available for some of the data inputs, enter them. For example, if the <br />zero flood depth elevation, the building square footage and the value of <br />contents are known, then enter the known values. In most cases, <br />however, only a few of the, required data inputs will be known exactly. <br /> <br />Typically, most of the data inputs for benefit-cost analysis will be <br />estimates, rather than exact numbers. If exact values are not <br />available, it is acceptable to use approximate values or your best <br />judgement. For example, if a neighborhood has houses of <br />approximately 1000 square feet and an average value of $60,000, then <br />it is acceptable to use these values as the average for the <br />neighborhood. It is om necessary to determine that one house is 927 <br />square feet and another 1083 square feet, or that one house is worth <br />$56,000 because the roof leaks and another is worth $62,500 because <br />it has an elegant fireplace in the living room. <br /> <br />For most small projects, approximate values may provide an acceptable <br />benefit-cost analysis. As project size (i.e., cost) increases, or for <br />projects whose benefit-cost ratio is very close to one, it may be <br />worthwhile to devote more time and effort to obtaining better estimates <br />or more exact values. <br /> <br /> <br />The level of detail, amount of data required, and level of effort <br />necessary to conduct a benefit-cost analysis of a hazard mitigation <br />project may vary substantially depending on the scale of the project and <br />the desired accuracy of the analysis. <br /> <br />The benefit-cost software is flexible and is designed to accommodate <br />different levels of analysis corresponding to different scales of projects <br />and desired level of accuracy. The simplest analysis, requiring the least <br />project-specific data, can be completed using "default" or reference <br />data built into the program, along with a minimum amount of required <br />project-specific data. More detailed analyses can, if desired, <br />incorporate a large body of project-specific data. ' <br /> <br />5-2 <br />