Property valuation: An approach for disaster management

Abstract

The purpose of compensation is to return victims to their previous position. Yet there is no proper systematic pathway for disaster valuation and government has been using the traditional replacement cost method, only considering physical damage, in Sri Lanka. This paper focused on identifying a comprehensive methodology to evaluate the damage caused by disasters faced by Sri Lankans to assess the amount of compensation for the loss. A random sample of 45 residents who faced the explosion of Salawa Armory at Avissawella and 15 professional valuers from the Government Valuation Department were interviewed, using a structured questionnaire. Damaged properties were inspected. Results reveal that ‘economic, environmental and social losses’ should also methodologically be added in calculating compensation, in addition to physical damages. Hence a comprehensive model includes pathway guidelines for disaster valuation to calculate the loss of income. It is recommended that a baseline information system should be maintained at GN level covering the whole country.