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.
Keywords: Disaster, damages, losses, valuation, compensation, Sri Lanka