The Loma Prieta Earthquake of 17 October 1989 represents an exogenous shock to the economic markets in the San Francisco Bay area. As such we would expect a set of short (transitory, lasting less than 6 months) and long (persistent, exceeding one year) term impacts to result. The objective of this research is to assess these impacts, to measure their initial magnitude and their propensity to persist into the future. Two potential impacts are considered: (i) the risk perceptions of citizens of the San Francisco Bay area; and (ii) the housing market. The study area consists of the counties of Alameda, Contra Costa, San Mateo, Santa Cruz, Santa Clara, Marin, and San Francisco (areas both damaged and undamaged by the earthquake). The outputs of the research will be fourfold. First, through analysis of the individual risk perceptions, we will achieve a better understanding of the risk perception formation process. The impact of an actual event in changing perceptions and causing subsequent behavioral changes will also be extensively studied. The role of the media and statements from public officials will also be assessed. Second, any short and/or long term effects on the housing market will be identified and quantified. Again, the role of the media and public officials will be assessed. Third, the welfare loss (in dollar terms) associated with the event and with any misconception of risk levels will be quantified. Finally, the value that individuals place on accurate geologic information will be determined through analysis of the housing market data. In essence, the value of knowing the relevant geologic information, either through mapping or hazard announcements will be obtained.
