ATC & SEI 2015 435

A Move toward Improved Portfolio Seismic Risk Assessment Methods for the
Practicing Engineer
D. Jared DeBock1 and Abbie B. Liel2
1
Dept. of Civil Engineering, California State Univ., Chico, Chico, CA. E-mail:
ddebock@csuchico.edu
2
Dept. of Civil, Environmental, and Architectural Engineering, Univ. of Colorado,
Boulder, Boulder, CO. E-mail: abbie.liel@colorado.edu

Abstract
The last decade has seen growing interest in probabilistic portfolio-level (regional)
seismic risk assessment. State-of-the-art methods build on established performance-
based earthquake engineering methods for individual buildings, in combination with
robust treatment of spatial correlations of ground motion intensity, building response,
and collapse, which complicate the analysis significantly. Consequently, these
methods are practically out of reach for many potential users. Relationships between
advanced portfolio risk assessments and a second set of risk assessments that are
based on the summation of risks for individual buildings are examined. Results for a
sample region show that a simple sum of the risks for each individual building within
a portfolio under-estimates the values of small frequent losses and over-estimates the
values of large rare losses. Since their differences are systematic, a simplified
procedure to estimate portfolio-level seismic risks based on assessments of individual
buildings (or building types) within the portfolio is feasible in the future.

INTRODUCTION
Portfolio-level (regional) seismic risk assessment is important for community
planners, insurers, developers, and others concerned about the collective risk of a
portfolio of buildings or a community. For the purposes of this paper, the term
“portfolio risk” refers to seismic risks for a collection of spatially distributed
buildings. Specifically, we set out to determine the rates at which the combined loss
for a portfolio of buildings exceeds various levels. This is similar in concept to
constructing a mean rate of exceedance (MRE, events per year) curve for loss
exceedance for an individual building, in which the total loss is the sum of the losses
for the individual building components. In the case of portfolio assessments, however,
each building is a “component” of the portfolio and the portfolio loss or MRE curve
is based on the sum of the losses to each building.
The paper presents key concepts to be used to develop simplified methods for
calculation of portfolio seismic risk. We envision a framework through which those
with a base knowledge of performance-based earthquake engineering for individual
buildings can take advantage of recent advancements in probabilistic regional seismic
risk assessment to achieve good results with reasonable effort. The remainder of the
paper is organized into four parts: (1) background and important aspects of
probabilistic regional seismic risk assessment, (2) description of regional seismic risk
assessments performed in this study, (3) comparisons of regional seismic risk
assessment results to simplified methods (i.e. simple summations of individual

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building analyses), and (4) discussion of methods to estimate portfolio-level risks

based on the risks assessed through the simplified methods.

BACKGROUND
Importance of Spatial Correlations Among Ground Motion Intensities and
Building Response
As far back as Park et al. (2007), it has been established that spatial correlations of
ground motion intensity are an important aspect of portfolio seismic risk assessment,
and they are directly related to spatial correlations of building response (DeBock et
al. 2014). Spatial correlations of ground motion intensity in an earthquake event are a
natural result of the ground motions at each building site originating from the same
fault rupture. There are two primary sources of the correlations. The first stems from
patterns of earthquake ground motion attenuation over distance from the earthquake
source; not all of the sites in a region will experience the same intensity of shaking,
and the intensity generally decreases (attenuates) with increasing rupture distance. An
important implication of these patterns is that a given earthquake event will not result
in identical hazard level shaking at every site. For example, a fault rupture may
produce shaking associated with the 1000-year mean recurrence interval (MRI) at a
site 10 km away and only a 100-year MRI at a site 50 km away. For this reason,
evaluating the MRE curves for each building in a portfolio and simply adding their
expected losses for each MRE level is incorrect and will produce a wrong answer
for the portfolio risk. For many portfolio seismic risk assessment methods,
correlation due to ground motion attenuation is captured by using ground motion
prediction equation(s) (GMPE, e.g. Boore and Atkinson 2008) to compute ground
motion intensities at all of the building sites for each fault rupture scenario that is
considered, because the GMPE accounts for ground motion attenuation over distance.
A second source of spatial correlations among earthquake ground motion intensities
is due to spatial correlations in the amount by which ground motion intensities
deviate from their expected values that are computed by a GMPE. The deviation from
the expected intensity is referred to as the residual in the GMPE. Ground motion
intensities at sites in close proximity to one another tend to be either both higher
(positive residuals) or both lower (negative residuals) than the GMPE prediction,
because they originate from the same source, propagate through a similar path, and
tend to have similar spectral content. Therefore, the residuals are positively
correlated. As inter-site distance increases, correlations of residuals decreases.
Several researchers have developed models to characterize spatial correlations among
ground motion intensity residuals (e.g. Loth and Baker 2013) and have demonstrated
their importance for portfolio risk assessments (e.g. Park et al. 2007).
Current State of Portfolio Seismic Risk Assessment
At their core, many probabilistic portfolio seismic risk assessment methods involve
some kind of Monte Carlo (MCS) simulation techniques in which several fault
rupture scenarios are considered. For each scenario, a number of possible ground
motion intensity maps are sampled for the region of interest, and portfolio losses are
computed for each one. The portfolio losses from the suite of MCS simulations can
be combined with the probability densities associated with each event to construct a

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MRE curve for the portfolio. A number of researchers have contributed to these
methods by developing ways to reduce computational time through importance
sampling and/or optimization (e.g. Jayaram and Baker 2010, Han and Davidson 2012)
and by investigating which aspects of the analysis are most crucial for obtaining
accurate results (e.g. Aslani 2012, DeBock and Liel 2015).
However, as demonstrated in this paper, the application of these methods is
complicated and requires significant effort on the part of the analyst. Alternatively,
relationships between portfolio-level risk and the simple summation of MRE curves
for the individual buildings in a portfolio may prove useful. These relationships
would provide earthquake engineers with a way to estimate portfolio risks using only
techniques that are applicable to individual buildings.

IMPLEMENTATION OF PORTFOLIO RISK ASSESSMENT

A full probabilistic portfolio seismic risk assessment is performed in this study, using
MCS methods. First, the test region and building portfolio (also called the building
stock) are described. Second, fault rupture scenarios are sampled with Monte Carlo
methods. Third, suites of ground motion intensity maps are created for each fault
rupture. Lastly, portfolio losses are computed for each ground motion intensity map
using vulnerability functions. The resulting suite of portfolio losses is used to
construct a MRE curve for the building portfolio.
Test Region and Building Portfolio
The test region is an approximately six mile by six mile area in Los Angeles,
California, as shown in Figure 1. For analysis, buildings are assigned to 23 locations
on a 2km (1.2 mile) grid.1 Twelve building types are considered, six reinforced
concrete (RC) moment frame buildings and six wood buildings; each building type
can represent a range of buildings within a portfolio with similar characteristics.2 The
RC buildings consist of three nonductile buildings (representing buildings built before
modern detailing requirements) and three ductile buildings (representing code-
conforming buildings with modern detailing requirements); they are two, four, and
eight stories tall. More detail about these buildings is available in DeBock and Liel
(2015), Liel et al. (2011), and Haselton et al. (2011). The six wood buildings are from
HAZUZ (FEMA 2003); they represent lightweight wood frame buildings with “high”
and “moderate” code designs and commercial/industrial buildings with “high,”
“moderate,” “low,” and “poor” code designs based on HAZUS (FEMA 2003)
designations.
This study considers a uniformly distributed building stock, with ten of each building
type at each of the 23 sites, for a total of 2760 buildings. However, for the purpose of
making comparisons between risk assessment methods, losses for all buildings are
normalized by their replacement values to compute a damage ratio (DR) rather than

1
Aslani et al. (2012) show that evaluating buildings on a 2 km grid spacing, where each building is
assigned to the grid point closest to its actual location, is sufficient for portfolio risk assessments.
2
DeBock and Liel (2015) demonstrate that only course representations of building types are necessary,
e.g. a 4-story building RC moment frame model could represent RC moment frame buildings ranging
from 3 to 6 stories tall. The most important classification is the code-level for which the buildings
were designed, because it is directly related to building strength and ductility capacity.

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an actual
a monetary loss. Thherefore, resuults of the reegional seism
mic risk asseessment are
representative of
o a portfolio
o in which eaach buildingg type is unifformly geographically
disttributed by monetary
m vallue, not by th
he actual nuumber of builldings.

Fig
gure 1: Test region loca
ation. Backg
ground from
m Google maps (Googlee 2015).
Fault Rup pture Scenarrios
A suite
s of appro oximately 94 40 potential fault rupturees, consistennt with the seeismicity of
the region, are considered
c for
f the MCS assessment.. This requirres identificaation and
chaaracterization
n of active faaults in the area
a and sam mpling of pottential rupturres for each
fault.
Acttive faults annd their propperties are ob m a database of California faults
btained from
thatt is publicallly available from
f the Callifornia Geoological Survvey (CGS 20013). The
dataabase provid des informattion such as start
s and endd coordinates, slip rate, mmaximum
maggnitude, and d fault type for
f the docum mented fault s in Californnia. Potential faults are
con
nsidered with hin a 200 km m radius of th
he region off interest.
Suiites of earthqquakes are saampled from m each fault uusing stratifiied samplingg, an
imp portance sammpling technique proposeed by Jayaraam and Bakeer (2010). Too do the
straatified samplling, the freq
quency densiity relationshhip of earthqquake magniitude for a
given fault is deetermined by y the charactteristic magnnitude-recurrrence relatioonship of
You ungs and Co oppersmith (1985) and th hen segmentted into seveeral partitionns (e.g.
Fig
gure 1a of Jay yaram and Baker
B 2010). The area wiithin a partittion correspoonds to the
annnual frequenccy at which earthquakes in that magn gnitude rangee are expecteed to occur
alon ng the fault. One magnittude is samp pled from eacch partition, and higher m magnitude
eveents are emph hasized by making
m finerr sampling paartitions at large magnituudes, and
weiighted by theeir probabiliity of occurreence. Followwing Jayaram m and Bakerr (2010),
only magnitudee 5.0 earthqu uakes and greeater are connsidered, sinnce smaller eearthquakes
are not expected to result in n significant damage to bbuildings in the U.S. Forr each
mpled earthq
sam quake, the lenngth of the fault
f rupture is estimatedd with empirical
relaationships deeveloped by Wells and Coppersmith
C h (1994), andd its locationn is
dessignated to a randomly seelected portiion of the fauult.
Ground Motion
M Intennsity Maps
Forr each of the approximattely 940 fault rupture sceenarios, 50 gground motioon intensity
mapps are generrated, using importance
i sampling
s tecchniques. Thhe result is
app
proximately 940 fault rup ptures x 50 intensity
i ure = 47,000 intensity
mapps per ruptur

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maps, in which rare events that result from large magnitude earthquakes and high
intensity shaking are emphasized.
To generate a suite of ground motion intensity maps for a given fault rupture, the
median and standard deviation of spectral acceleration intensity for each
representative site and building period are characterized with the 2008 Boore and
Atkinson GMPE (Boore and Atkinson 2008). The expression for spectral acceleration
intensity at site i, event j, (Saij) is:
= + + (1)
where is the median of , and are the intra-event and inter-event
logarithmic standard deviations of , and the residual terms, and , are
standard normal variables.
Intensity maps are produced by sampling random values of and and
substituting them into Equation 1. Following Jayaram and Baker (2010), samples of
the residuals are biased high to emphasize rare events, and importance factors are
assigned to each realization to compensate for the shifts in the distributions of the
residuals. Several researchers (e.g. Park et. al 2007) have shown that accounting for
spatial correlations of the intra-event residual term ( ) is crucial for regional seismic
risk assessments. Therefore, spatially correlated sets of are sampled using the
spatial cross-correlation model developed by Loth and Baker (2013). The inter-event
residual term ( ) is constant across all sites for a given earthquake scenario and
building period, but does vary from one period to the next. The inter-event residual
terms for different fundamental periods are positively correlated with one another,
and are modeled according to Baker and Cornell (2006).
Computation of Portfolio-Level Losses
For each ground motion intensity map that is sampled in the MCS analysis, a loss for
each building in the portfolio is computed, based on the ground motion intensity at its
site. The regional loss for an intensity map is the sum of the losses for all buildings in
the portfolio. However, this study normalizes building losses by their replacement
values to compute DR. Since each building type is assumed to represent an equal
portion of the total portfolio value, the DR for the portfolio is the simple average of
DRs from all of the individual buildings.
Losses Due to Building Collapses
Collapsed buildings are assigned a DR of 1.0. Buildings are assumed collapsed if the
ground motion intensity at their site is greater than their collapse capacity (i.e. the
ground motion intensity that causes collapse). A collapse fragility function, which
represents the probability of collapse as a function of ground motion intensity, can be
developed for each building type on the basis of empirical or analytical studies. Once
this information if available, collapse capacities for each building are sampled from a
collapse fragility function for each ground motion intensity map. A procedure
recommended by DeBock and Liel (2015) is used, so that the effect of some
earthquakes producing ground shaking frequency content that causes collapse at
lower or higher spectral acceleration intensity than other earthquakes is captured. The

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DeBock and Liel approach is completed in two steps. Step one is to sample a “region-
wide” collapse capacity that is unique to each intensity map from each building type’s
collapse capacity distribution, considering record-to-record variability of collapse
capacity. Second, collapse capacities for each individual building are sampled from a
lognormal distribution whose median is the region-wide collapse capacity for the
building type (from step one) and whose dispersion is the total collapse capacity
dispersion of that building, but with record-to-record variability removed (i.e. use
only non-record-to-record sources of variability that are not captured in step one, such
as variations in design and construction quality).
Properties of the collapse capacity distributions for the RC moment frame buildings
and the wood frame buildings are summarized in Tables 1 and 2, respectively. The
median collapse capacity, record-to-record collapse capacity dispersion (σRTR), and
correlation of collapse capacity with the total ground motion intensity residual ε 3 for
the RC moment frame buildings are estimated with nonlinear analytical models, using
the FEMA P-695 (FEMA 2009) far-field ground motion set. The models were
developed by Haselton et al. (2011) and Liel et al. (2011), and analyzed with
OpenSEES. The total collapse capacity dispersion is approximated based on the
methods described in FEMA P-695 (FEMA 2009). The median collapse capacity and
total collapse capacity dispersion of the wood frame buildings are deduced from the
HAZUZ vulnerability functions. Based on FEMA P-695 recommendations and
judgment, σRTR and the correlation of collapse capacity with ε for the wood frame
buildings are assumed to be 0.4 and 0.5, respectively.
Table 1: Collapse quantities for representative RC moment frame buildings.
Bldg ID RC2h RC4h RC8h RC2l RC4l RC8l
Stories 2 4 8 2 4 8
Building Code Level
High High High Low Low Low
[HAZUS Terminology]
Period, T1, sec [Calculated from
0.60 0.91 1.81 1.03 1.92 2.23
Analysis]
Median Collapse Capacity,
Sa(T1), g [Calculated from 2.14 1.45 0.61 0.39 0.25 0.22
Analysis]
Total Collapse Dispersion, σ
0.55 0.55 0.55 0.60 0.60 0.60
[FEMA P-695 Approximation]
σRTR [Calculated from Analysis] 0.50 0.43 0.41 0.35 0.32 0.42
Collapse Correlation with ε
0.62 0.46 0.65 0.38 0.52 0.65
[Calculated from Analysis]

3
Collapse capacity is positively correlated with the ground motion intensity residual, ε, associated with
the building’s fundamental period. That is because large (small) values of ε are often a result of peaks
(valleys) of the acceleration spectrum, meaning that the rest of the spectrum tends to have less (more)
energy than a typical ground motion with the same spectral acceleration at the building’s fundamental
period (Baker and Cornell 2005). This correlation can be obtained by examining collapse capacity as a
function of the ε of the record used to compute the collapse capacity

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Table 2: Collapse quantities for representative wood frame buildings.

Bldg ID W1h W1m W2h W2m W2l W2p
Description Wood Light Frame Wood Commercial and Industrial
Stories [Typical] 1 1 2 2 2 2
Building Code Level
High Moderate High Moderate Low Poor
[HAZUS]
Period for Vulnerability
0.30 0.30 0.30 0.30 0.30 0.30
Function Input
Median Collapse Capacity,
6.48 3.63 7.46 3.99 2.61 2.15
Sa(0.3 sec) [Deduced]
Total Collapse Dispersion, σ
0.50 0.50 0.60 0.50 0.54 0.55
[Deduced From HAZUS]
σRTR [FEMA P-695
0.40 0.40 0.40 0.40 0.40 0.40
Approximation]
Collapse Correlation with ε,
0.50 0.50 0.50 0.50 0.50 0.50
[Assumed]

Losses of Non-Collapsed Buildings

Damage ratios for non-collapsed buildings are determined with vulnerability
functions (e.g. Figure 2). A vulnerability function takes spectral acceleration at the
building’s fundamental period as input, and outputs loss in dollars or DR for the
building. Vulnerability functions for the RC moment frame buildings are documented
in DeBock and Liel (2015). Vulnerability functions for the wood buildings are
determined from HAZUS (FEMA 2003), but modified to be conditional on no
collapse, since collapse cases are treated separately.
Like collapse capacity, vulnerability functions can be affected by spectral shape.
However, DeBock and Liel (2015) show that conditioning vulnerability functions on
spectral shape does not benefit the analysis. Therefore, the vulnerability functions are
not conditioned on spectral shape for this study.

W2m | No Collapse RC4h | No Collapse

Damage Ratio (DR)

Damage Ratio (DR)

0.4 0.4

0.2 0.2

0 0
0 2 4 0 1 2 3
Sa(0.3 sec) Sa(1.8 sec)

Figure 2: Example vulnerability functions for W2m and RC4h, conditioned on

no collapse

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COMPARISONS BETWEEN PORTFOLIO SEISMIC RISKS AND A SIMPLE

COMBINATION OF INDIVIUAL BUILDING RISKS
Results of the portfolio seismic risk assessment are examined with emphasis on how
they compare to a simple combination of individual building risks. The primary
objective of these comparisons is to hypothesize whether or not portfolio risk can be
estimated from the summation risks of individual buildings in the portfolio.
Simple Combination of Individual Building Risks
Quasi portfolio risk estimations are performed by computing seismic risks for
individual buildings within the portfolio and simply adding them together to estimate
the total risk. For example, the estimation of the portfolio loss with an expected
exceedance frequency of once every 1000 years (i.e. the 1000-year loss) would be the
sum of the 1000-year losses for all of the individual buildings in the portfolio. Recall
that this method of calculating the portfolio risk is incorrect. However, it may be
useful if its deviations from robust methods are systematic and quantifiable, since the
computations are much more straightforward.
In this study, seismic risks for individual buildings are computed by integrating their
vulnerability functions with seismic hazard curves. The hazard curves are obtained
directly from the ground motion intensity maps that were produced in the portfolio
risk assessment. Therefore, comparisons between the two methods are free from any
differences that may be caused by discrepancies in the seismic hazard that is used for
each. The vulnerability functions for computing individual building risks are similar
to those used in the portfolio risk assessment, except that they represent the losses
from both collapse and no collapse cases. In other words, the probability of collapse
is included in the vulnerability functions themselves, assuming that collapse leads to
DR = 1.0. They are mathematically equivalent to the combination of the vulnerability
functions and collapse capacity distributions used in the portfolio assessments, except
that the probability of collapse is no longer conditional on spectral shape.
Comparisons Between Risk Assessments
The MRE curve that is computed by a simple summation of building risks for the test
portfolio is not equivalent to the MRE curve that is computed with a proven portfolio
risk assessment method, as demonstrated in Figure 3. The simple summation method
tends to overestimate the magnitude of rare losses (i.e. those with MRE less than 10-2)
and underestimate the value of more frequent portfolio losses. These errors occur
because the simplified procedure incorrectly assumes that all of the buildings in the
region will experience ground shaking corresponding to the same hazard level in a
given earthquake. This assumption is incorrect, but statistically similar to artificially
overestimating the correlation of ground motion intensity among building sites.
Increases in spatial correlation increase large rare losses and decrease small frequent
losses (e.g. Park et al. 2007), which is precisely what is observed here.
Comparisons of Risk Calculation Methods for the Whole Portfolio
A plot of the ratios of the two MRE curves, Figure 3(b), shows that the best estimate
of portfolio loss (DRPortfolio) is on the order of 70% of that predicted by the simple
summation method over a large range of the potential portfolio damage. This finding
suggests that a crude method for converting the simple sum of building risks to

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portfolio risks would be to multiply the simply computed DR (DRSimple Sum) by a

correction factor of 0.7 to obtain a portfolio DR, when the simple DR is in the range
of 0.2 to 0.8. When the simple estimate of DR is between 0 and 0.2, the ratio (i.e. the
correction factor) approximately varies from 1.2 for low DR to 0.7 and the high end
of the range. For extremely rare levels of loss (DRSimple Sum > 0.8), the ratio approaches
1.0, because very rare earthquakes will result in DR = 1.0, regardless of which
method is used to evaluate the portfolio damage.
0
10
DRPortfolio 1.3

(DRPortfolio/DRSimple Sum)
1.2

Correction Factor
-2 DRSimple Sum
MRE (Years -1)

10
1.1
1
-4 0.9
10
0.8
0.7
-6
10
0 0.2 0.4 0.6 0.8 1 0 0.2 0.4 0.6 0.8 1
DR DRSimple Sum

Figure 3: (a) MRE vs. DR for the test building portfolio for the two different
methods. (b) Ratio of the DR computed with a robust portfolio risk assessment
technique (DRPortfolio) to the DR obtained by a simple summation of the risks
associated with the individual buildings in the portfolio (DRSimple Sum), as it varies
with DRSimple Sum.
Comparisons for Portfolios Consisting of Only a Single Building Type
To further investigate these findings, portfolio level risk is computed for 12 subsets of
the test building stock, wherein each subset is composed of only one building type.
The comparisons in Figure 4 show that building characteristics impact the difference
between DR from the robust portfolio risk assessment method versus the simple
summation method. Notice that as collapse capacity (which depends on strength and
ductility) increases, so does the difference between the Monte Carlo portfolio risk
assessment results and simple sum risk assessments. The difference also increases as
building height (and period) increases, as seen by the lines for the two, four, and eight
story RC buildings, but these changes are more subtle.
Building diversity has only a small impact on the difference between the simple
summation method and the robust portfolio assessment method, except at large rare
levels of loss. An assessment of the whole portfolio (i.e. a diverse building stock
containing twelve building types) shows lower loss at large rare DR values than the
average of twelve separate assessments that are each for homogeneous portfolios
containing only a single building type. This discrepancy occurs because increasing
building diversity decreases the correlation of collapse among buildings; therefore, a
diverse building portfolio is less likely to experience widespread collapse than a
homogenous building portfolio. At lower levels of loss, the impacts of correlations

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among building collapse represented by the different building portfolios are relatively
insignificant.

1.4
1:1
Correction Factor (DRPortfolio/DRSimple Sum)

1.3 RC2h
1.2 RC4h
RC8h
1.1 RC2l
1 RC4l
RC8l
0.9
W1h
0.8 W1m
W2h
0.7
W2m
0.6 W2l
0.5 W2p
Average
0.4 Whole
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
Portfolio
DRSimple Sum

Figure 4: Correction factor, i.e. the ratio of DR computed with a robust portfolio
risk assessment technique (DRPortfolio) to DR obtained by a simple summation of
the risks associated with the individual buildings in the portfolio (DRSimple Sum), as
it varies with DRSimple Sum. Each thin line represents a different version of the
building portfolio, which is composed of just one building type rather than all
twelve. Collapse capacity of each building type, from high to low, is indicated by
solid, dashed, dash-dot, and dotted lines.

CONCLUSIONS, RECOMMENDATIONS, AND FUTURE WORK

A probabilistic portfolio risk assessment is performed for a building portfolio
occupying a 36 sq. mile region in southern California, using Monte Carlo Simulation
techniques that are established in the literature. The main steps are: identifying and
characterizing active faults in the region, simulating fault rupture scenarios,
simulating ground motion intensity maps for each scenario (accounting for spatial
correlations and period-to-period correlations of ground motion intensity), and
computing building losses for each ground motion intensity map, taking into account
inter-event variability of building collapse vulnerability.
The steps to complete a portfolio risk assessment are time-consuming and difficult.
Therefore, a pre-packaged program, similar in concept to PACT (FEMA 2012) or
SP3 (HB-Risk 2015), but geared toward portfolio risk assessment, would be a useful
means for putting state of the art portfolio risk assessment tools into the hands of
engineers, architects, and other interested parties. We expect that such a tool will
eventually exist, although the timeline is difficult to predict. Alternatively, a method
for deriving portfolio risks from risk assessments of individual buildings in the

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portfolio may be advantageous, since this could use existing tools for assessing risks
in individual buildings in a straightforward way.
Therefore, in this study, the results of the portfolio risk assessment are compared to
simple summations of risk for each individual building in the portfolio. The simple
summation of individual building risks underestimates frequent losses (MRE > 10-2
yrs-1) and overestimates rare losses (MRE < 10-2 yrs-1). The cause of this difference is
that adding the MRE curves from the individual buildings in the portfolio assumes
that each earthquake event produces the same hazard-level shaking at every building
site in the portfolio, which is not the case for a real earthquake.
However, differences between the results of the robust portfolio risk assessment and
the simple summation of building risks are systematic, which implies that the
differences can be quantified. Therefore, damage ratios from the simple summation
method (DRSimple Sum) can be converted to the expected damage ratios for the portfolio
by multiplying them by a correction factor. For the 36 sq. mile southern California
region in this study, the correction factor should be approximately 0.7 for DRSimple Sum
ranging from 0.2 to 0.8. Modifying the portfolio to contain mostly buildings with low
collapse resistance increases the value of the correction to 0.8 (a 0.1 increase), and
modifying the portfolio to have mostly buildings with high collapse resistance
decreases the correction factor to about 0.6 (a 0.1 decrease).
This study demonstrates that the MRE curve for a regionally distributed building
portfolio can be approximated by combining the MRE curves from individual
buildings within the portfolio and applying a correction factor. However, future work
is necessary to determine how properties of the building portfolio and the region it
occupies affect the correction factor. The authors hypothesize that the most important
aspects of a building portfolio for converting the sum of individual building risks to a
portfolio-level risk are: region size, tectonic environment, and the collapse capacities
of the buildings that make up the building portfolio. Of these three, only the effect of
collapse capacity is observed in this study. A number of sensitivity studies are
required to determine how several aspects of the building portfolios may affect the
differences between portfolio-level risk assessments and the simple summation of
individual building risk assessments. Once these factors are quantified, they will
enable engineers to estimate portfolio-level risks based on individual building risk
assessments.

REFERENCES
Aslani, H., C. Cabrera, M. Rahnama (2012). Analysis of the sources of uncertainty for
portfolio‐level earthquake loss estimation. Earthq. Eng. Struct. Dyn. 41 1549-1568.
ATC (2012a). Seismic performance assessment of buildings: volume 1- methodology
(ATC-58-1). Prepared by ATC for FEMA.
ATC (2012b). Seismic performance assessment of buildings: volume 2- implementation
guide (ATC-58-2). Prepared by ATC for FEMA.
Baker, J.W., C.A. Cornell (2005). A vector-valued ground motion intensity measure
consisting of spectral acceleration and epsilon, Earthq. Eng. Struct. Dyn. 34 1193–
1217.

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