The Costs And Costs Of The Cost Of Building New Orleans

Next, it is necessary to identify the land that is possibly flooded and this can be calculated as: 0.50 x 0.63 = 0.315 or 31.5% of the land is flooded. Hence the probability that the area is flooded is 0.315 or 31.5%. Assuming the probabilities, rebuilding the city together with the levees will amount to $1.818 trillion in 100 years. Rebuilding the levees as of 2010 was $14 million; however, there is an additional cost of the residual risk of Katrina. This residual risk can be calculated as: $14 / 0.6223 = $22.5 billion. This implies that rebuilding the levees would amount to a total of $14 + $22. 5 = $36.5 billion. Thus, with these estimates, the cost of rebuilding New Orleans for the federal government would be: Cost of building new†¦show more content†¦In addition, some of the New Orleans residents might decide to rebuild their homes and businesses themselves instead of waiting for the federal government. While considering rebuilding New Orleans, a good question to ask is what the government would do with the money that it plans to use to rebuild the city if it was diverted to other projects. The best thing to do would be to build another city elsewhere or settling the people and businesses affected away from the city. Another option would be to give a cash settlement to every individual, family or business that suffered a loss and allow them to choose to rebuild in New Orleans or elsewhere. Suppose the federal government would spend $1.818 trillion to rebuild the city but instead gives a cash settlement to the city dwellers who are about $1.3 million people, each resident would get about $1.39 million that is more than enough to pay for a new home and business in a different town. One pitfall for the federal government to rebuild the city is that spending that huge amount of money might not make sense if the residents do not want to stay. This would imply that the new city would become obsolete despite the billions spent to rebuild. To avert this risk, the government will need to assess whether the people want to stay and whether New Orleans needs a big city (Glaeser, 2005). The estimated relevant expected utility The probability (p) of a hurricane similar toShow MoreRelatedNew Orleans : Hurricane Katrina1686 Words   |  7 PagesIn the year 2005, New Orleans was famously hit a major natural disaster that took lives and destroyed the homes and civilians. This wrath of Mother Nature became to be known as Hurricane Katrina, a category 5 hurricane with gusts peaking at 174/mph according to the Safir- Simpson wind scale (SSHS). With this Hurricane having its path directly on a city only being on average 1-2 feet below sea level, it created conditions for serious havoc (NOAA, 2012). 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