Human Capital Approach in the Economic Assessment of Interventions for the Reduction of Seismic Vulnerability in Historic Centres

Round 1

Reviewer 1 Report

The author prepared an interesting article - a case study in which she used selected methods to quantify the value of human capital for a particular Italian city for the needs of economic evaluation of seismic risks in the historic center of this city. It is part of a larger research study.

The article is of a scientific nature. The methods used are appropriate and adequate to the presented topic.

I appreciate the amount, timeliness and structure of the literary and statistical sources used.

To improve the quality of the article, I recommend:

• Explain clearer and more effectively the methods used and the results of the study in the abstract.
• Section 2.6. "Data sources" Move to section 2 "Methods".

Author Response

sustainability-922128

 

1^st Round review

Cover letter

I would like to thank the Reviewers and Editor for their detailed comments and suggestions for the manuscript.

I believe that the comments have identified important areas which required improvement.

After completion of the suggested edits, the revised manuscript has benefitted from an improvement in the overall presentation and clarity.

Below, you will find a point by point description of how each comment was addressed in the manuscript; original reviewer comments in black color and responses in red color.

 

Reviewer 1

Many thanks for these comments, remarks and suggestions that significantly contribute to improve the quality and the readability of the manuscript.

The author prepared an interesting article - a case study in which she used selected methods to quantify the value of human capital for a particular Italian city for the needs of economic evaluation of seismic risks in the historic center of this city. It is part of a larger research study.

The article is of a scientific nature. The methods used are appropriate and adequate to the presented topic.

I appreciate the amount, timeliness and structure of the literary and statistical sources used.

Thanks for the positive comments.

To improve the quality of the article, I recommend:

• Explain clearer and more effectively the methods used and the results of the study in the abstract.

 

Subsection 2.6. "Data sources" is already present in the Methods section.

 

Author Response File: Author Response.pdf

Reviewer 2 Report

Overview

The paper under review addresses a very important issue in economic analysis, namely the estimation of the value of human capital (HC). HC has been more prevalent in the contemporary society which places more value on knowledge, skills, and innovation. The analysis uses very comprehensive approaches of estimation of the value of HC aimed at providing information for formulation of intervention policy to reduce seismic risks in historical centers. The study estimates the value of HC in Brisighella as a case study.

The objective of this study is to determine the Value of a Statistical Life - VSL on the basis of the human capital approach, instrumental for the quantification of benefits/revenues in the framework of the effects on the population from the potential plan of interventions to reduce the seismic vulnerability of historic centers.

This study is a part of a comprehensive project of economic assessment of seismic risk reduction interventions in historical centers. The major findings pertain to the comprehension of the estimation of the value of HC in general, and for Brisighella in particular. It is revealed that the contribution to the value of HC by age groups and their associated assets are crucial for the accuracy of the estimation.

Evaluation

Strength

1. The author provides very comprehensive explanation and discussion on the methodologies of estimating the value of HC developed by Jorgenson and Fraumeni and by Dagum. The author then proposed an empirical approach for estimation of the value of HC by combing the two aforementioned approaches and estimated the value of HC of the population in Brisighella. This is, indeed, a comprehensive and time-consuming task and should be recognized.
2. The author discussed some of the major challenges and limitations of the approaches applied in the study, such as the subjective nature of the discount rate; the changes in remuneration resulting from the variations in experience accumulation; the extensive requirement of disaggregate data/information for the estimation of the value of HC; the change in the population composition over time in Italy; the spatial differences in the macroeconomic indicators and their possible impact on the estimation of the value of HC. This has helped readers understand the problem at hand and the task (of estimating the value of HC) more comprehensively.
3. The study has provided detailed estimates of the value of HC for Brisighella, classified by age categories, education levels, economic activities (market assets, non-market assets (production, leisure)).
4. Based on the results of the analysis, the author discussed some aspects of intervention (policy) on seismic risk reduction/management for historical centers, such as Brisighella.

 

Weakness/Suggestions for improvement

1. Some information on the significance of Brisighella (the position of Brisighella in Italy’s historical centers or cultural assets) would enhance the justification of the selection of the study site.
2. The estimation revealed that the medium education level (ISCED 3/4) comprises the largest share in the value of HC in Brisighella in the three age groups under study (Table 3; Table 4; and Table 6). An explanation on why higher levels of education have smaller contribution to the value of HC would be expected when reading the discussion session.
3. In Brisighella, historical real estate assets show a significant contribution to the value of HC. However, most of the buildings were built before 1919 and their value would contribute to HC of the heirs of the initial owners (I presume) or the current owners, while they might have little investment in creation of these assets. In other forms of HC, such education and experience, the owner of this HC form would have invested in creating the HC (time, efforts, cost of study, etc.). This particular characteristic of Brisighella deserves more explanation.
4. It is presumed that the values of HC shown in the analysis are of 2008. It would be interesting to see how labor mobility in to and out of Brisighella or the change in population composition would affect the value of HC.
5. I understand that this work is a part of the first phase of a comprehensive project. However, it is felt that the link between this analysis and the proposed intervention to reduce seismic risk is somewhat missing or not clearly addressed. The title of the paper contains ‘seismic risk reduction’, but the analysis and the resulting discussion have not addressed this issue sufficiently.
6. Finally, I have a question: Would risk management or disaster management in historical centers be more about preserving HC or preserving the social and cultural value of the historical centers or national treasures?

Thank you.

Author Response

sustainability-922128

 

1^st Round review

Cover letter

I would like to thank the Reviewers and Editor for their detailed comments and suggestions for the manuscript.

I believe that the comments have identified important areas which required improvement.

After completion of the suggested edits, the revised manuscript has benefitted from an improvement in the overall presentation and clarity.

Below, you will find a point by point description of how each comment was addressed in the manuscript; original reviewer comments in black color and responses in red color.

 

Reviewer 2

Many thanks for these comments, remarks and suggestions that significantly contribute to improve the quality and the readability of the manuscript.

The paper under review addresses a very important issue in economic analysis, namely the estimation of the value of human capital (HC). HC has been more prevalent in the contemporary society which places more value on knowledge, skills, and innovation. The analysis uses very comprehensive approaches of estimation of the value of HC aimed at providing information for formulation of intervention policy to reduce seismic risks in historical centers. The study estimates the value of HC in Brisighella as a case study.

The objective of this study is to determine the Value of a Statistical Life - VSL on the basis of the human capital approach, instrumental for the quantification of benefits/revenues in the framework of the effects on the population from the potential plan of interventions to reduce the seismic vulnerability of historic centers.

This study is a part of a comprehensive project of economic assessment of seismic risk reduction interventions in historical centers. The major findings pertain to the comprehension of the estimation of the value of HC in general, and for Brisighella in particular. It is revealed that the contribution to the value of HC by age groups and their associated assets are crucial for the accuracy of the estimation.

Strength

1. The author provides very comprehensive explanation and discussion on the methodologies of estimating the value of HC developed by Jorgenson and Fraumeni and by Dagum. The author then proposed an empirical approach for estimation of the value of HC by combing the two aforementioned approaches and estimated the value of HC of the population in Brisighella. This is, indeed, a comprehensive and time-consuming task and should be recognized.

 

Thank you for your positive comments and for acknowledging my commitment to an in-depth study at HC.

Indeed, research on the definition and approaches for the determination of HC has engaged me for a long time, but without a thorough knowledge of the issue under study it would not have been possible to identify the empirical instrumental approach for the assessment of seismic risk reduction interventions for historic centres, with a view to a more comprehensive and in-depth assessment process, which could be extended overall to the assessment of planning interventions in general.

 

1. The author discussed some of the major challenges and limitations of the approaches applied in the study, such as the subjective nature of the discount rate; the changes in remuneration resulting from the variations in experience accumulation; the extensive requirement of disaggregate data/information for the estimation of the value of HC; the change in the population composition over time in Italy; the spatial differences in the macroeconomic indicators and their possible impact on the estimation of the value of HC. This has helped readers understand the problem at hand and the task (of estimating the value of HC) more comprehensively.

Thank you for your positive comments.

 

1. The study has provided detailed estimates of the value of HC for Brisighella, classified by age categories, education levels, economic activities (market assets, non-market assets (production, leisure)).

 

Thank you for your positive comment.

 

1. Based on the results of the analysis, the author discussed some aspects of intervention (policy) on seismic risk reduction/management for historical centers, such as Brisighella.

Thank you for your positive comment.

 

 

 

Weakness/Suggestions for improvement

1. Some information on the significance of Brisighella (the position of Brisighella in Italy’s historical centers or cultural assets) would enhance the justification of the selection of the study site.

 

Thank you for highlighting this criticality.

Section 2.Material has been integrated to support Brisighella’s choice in the Faenza Union area.

 

1. The estimation revealed that the medium education level (ISCED 3/4) comprises the largest share in the value of HC in Brisighella in the three age groups under study (Table 3; Table 4; and Table 6). An explanation on why higher levels of education have smaller contribution to the value of HC would be expected when reading the discussion session.

 

I thank you for your request for clarification, which helped me to identify an error in Figure 5 that has now been corrected.

Obviously ISCED 5/6 produces a higher HC value than ISCED 3/4.

The HC values shown in Figure 5 are due to the destruction of the population in the different age and ISCED groups.

In order to improve the understanding of the results, I integrated this section with Figure 6, which highlights the distribution of the population of Brisighella by age and ISCED.

 

1. In Brisighella, historical real estate assets show a significant contribution to the value of HC. However, most of the buildings were built before 1919 and their value would contribute to HC of the heirs of the initial owners (I presume) or the current owners, while they might have little investment in creation of these assets. In other forms of HC, such education and experience, the owner of this HC form would have invested in creating the HC (time, efforts, cost of study, etc.). This particular characteristic of Brisighella deserves more explanation.

 

The real estate of the historic center Brisighella was built before 1919.

The valuation of the HC related to the real estate was carried out on the basis of the current owners.
This has been introduced in Section 4.3.

 

1. It is presumed that the values of HC shown in the analysis are of 2008. It would be interesting to see how labor mobility in to and out of Brisighella or the change in population composition would affect the value of HC.

 

The HC estimation data with the Jorgenson-Fraumeni approach determined by ISTAT are for 2008, although the report was published in 2014.

The analysis on the change of composition for the population has been excluded because currently the Faenza Union has a negative demographic balance (-213 inhabitants compared to 2018) in contrast to the positive figure on a regional scale.

This situation is demographic fragile and at risk of depopulation. The Faentine Union has in fact prepared a strategic plan to relaunch the whole area, with a tourist vocation, trying to promote slow tourism.

Thanks to your suggestion regarding point 1 regarding section 2.Material, some peculiarities of this territory are now clearer.

In general, the data of the population of Brisighella have recorded a migratory balance with foreign countries of +27 and a total migratory balance -3 for 2018, these values, have worsened for the year 2019 recording a value of +14 in the first case and -41 in the second case. The latter question is referred to in Section 5. Discussion and conclusion at the end of page 22.

With regard to incoming and outgoing job mobility, it would be interesting to estimate the effects on the value of HC, but this would require further research that I would refer to another paper.

 

1. I understand that this work is a part of the first phase of a comprehensive project. However, it is felt that the link between this analysis and the proposed intervention to reduce seismic risk is somewhat missing or not clearly addressed. The title of the paper contains ‘seismic risk reduction’, but the analysis and the resulting discussion have not addressed this issue sufficiently.

 

Thank you for highlighting this criticality.

I am aware of this, but the determination of a measure for human capital has required a specific deepening relegating to a more marginal space the question of the estimation of the benefits associated with the reduction of seismic risk.

The results relating to the benefits of seismic risk reduction interventions will be determined in the second step, because this issue deserves more space.

In Section 5. Discussion and Conclusion, a short note was introduced that highlights the limitations of this study in relation to this issue and presents the future development program of this study.

 

 

1. Finally, I have a question: Would risk management or disaster management in historical centers be more about preserving HC or preserving the social and cultural value of the historical centers or national treasures?

Risk management or disaster management in historic centres certainly concerns the preservation of the social and cultural value of historic centres.

In this paper, HC is a specific approach for the determination of the Value of a Statistical Life - VSL to assess the effects of seismic vulnerability reduction interventions on the risk of death, more or less serious injuries on the population.

The protection of the lives of the inhabitants is a priority.

 

 

Author Response File: Author Response.pdf

Reviewer 3 Report

Generally, research articles must be self-contained. This paper presents a very limited part of a large project as a first step as author mentioned, and the purpose and achievement of THIS paper is not clearly addressed. The main analytical result of this paper seems to be the calculation of human capital in monetary term. The result itself looks interesting, but the result is not connected at all to seismic risk reduction policy which is keyword appeared in the title and which is discussed in most part of introduction and first part of methods section. It is quite confusing due to the misleading introduction section and discussion section with various issues which is not directly related to the analytical section. Therefore, it is difficult to find what is the academic contribution of THIS paper. I recommend author to reconsider the title, re-organize the structure of manuscript, rewrite thoroughly, and resubmit as another paper..

Author Response

sustainability-922128

 

1^st Round review

Cover letter

I would like to thank the Reviewers and Editor for their detailed comments and suggestions for the manuscript.

I believe that the comments have identified important areas which required improvement.

After completion of the suggested edits, the revised manuscript has benefitted from an improvement in the overall presentation and clarity.

Below, you will find a point by point description of how each comment was addressed in the manuscript; original reviewer comments in black color and responses in red color.

 

Reviewer 3

 

Generally, research articles must be self-contained. This paper presents a very limited part of a large project as a first step as author mentioned, and the purpose and achievement of THIS paper is not clearly addressed. The main analytical result of this paper seems to be the calculation of human capital in monetary term. The result itself looks interesting, but the result is not connected at all to seismic risk reduction policy which is keyword appeared in the title and which is discussed in most part of introduction and first part of methods section. It is quite confusing due to the misleading introduction section and discussion section with various issues which is not directly related to the analytical section. Therefore, it is difficult to find what is the academic contribution of THIS paper. I recommend author to reconsider the title, re-organize the structure of manuscript, rewrite thoroughly, and resubmit as another paper.

 

Many thanks for these comments, remarks and suggestions that significantly contribute to improve the quality and the readability of the manuscript.

 

This contribution is part of a wider project aimed at establishing a general model of analysis, assessment and planning of seismic reduction interventions for conservation in the historic city.

In the first phase a Cost-based programming model was proposed. The main steps of the first phase, to improve the level of understanding of this paper were summarized in this new version of paper in subsection 2.6.

The second phase of the research is aimed at defining a Benefit-based programming model.

The determination of the benefits that potential seismic reduction interventions can generate, which concern the effects on the safety of the population and those on urban and social capital, required given the complexity of the issue, specific insights, which do not have the opportunity to be described in a single paper.

Hence the choice to separate the two steps from the second phase of the research. The first step aimed at identifying an approach capable of estimating the effects on the population of seismic reduction interventions, the second one on urban capital.

It is possible to estimate the benefits produced on the population with reference to the Value of a Statistical Life - VSL.

For the estimation of the Value of a Statistical Life - VSL different approaches exist in literature, what best suited the needs of this study was the approach to HC.

A critical review of the literature on HC assessment approaches has been instrumental in defining an empirical approach that responds to the need to measure the benefits of seismic reduction interventions on the population.

On the basis of the empirical approach a model has been identified for the quantification of the benefits produced on the population by the plan of interventions to reduce the seismic vulnerability of the historical center, which was introduced in this new version of the paper in subsection 2.6.

 

Finally, the paper title has been modified as recommended.

 

Author Response File: Author Response.pdf

Round 2

Reviewer 3 Report

As author mentioned in the reply to the reviewer’s comments, the purpose of this article is to evaluate the human capital for centre of Brisighella. I think author successfully calculated the HC as presented in the result section. However these results are not reflected the seismic vulnerability or reduction of its risk again. Even though a method section to quantify the risk reduction measures on HC, but the newly added method seems not to be applied in the analysis. If author want to fucus on the quantification of HC, then the target of this paper should be clearly addressed in the earlier part of introduction section. Otherwise readers may be confused as if this paper assessed the seismic vulnerability reduction measures. With this reason, the title seems to be misleading as well, because the seismic vulnerability issue is just a background of this paper. I recommend author to rewrite the paper as to focus on the HC evaluation.

Author Response

sustainability-922128

 

2^nd Round review

Cover letter

 

Many thanks for helping to improve the paper

 

The estimation of the Value of a Statistical Life - VSL is an approach widely present in the literature for the determination of the effects produced by economic, environmental and health policies in general, and in particular for the assessment of investments aimed at reducing the risks related to natural disasters, especially in relation to climate change. The assessment of the damage caused to the population by such natural events is a recurrent issue in scientific production.

The Value of a Statistical Life - VSL is often related to VOLY (Value of a life year) DALY-Disability adjested life year) a measure of the overall severity of a disease, expressed as the number of years lost due to illness, disability or premature death; Value of a Prevented Fatality (VPF): values small changes in Fatality risks; Value of Statistical Life Year (value of a SLY or VOLY): values the impact of risks to the length of life; Quality Adjusted Life Year (QALY): values in health-values related quality of life and length of life.

These are consolidated approaches for the assessment of public health investments, in case the population is exposed to risks of disasters, chemical safety, infrastructure investments (highways), etc.

Among the approaches present in the literature for the estimation of the Value of a Statistical Life - VSL it is possible to detect also that of the Human Capital.

The estimation of the Value of a Statistical Life - VSL is instrumental to determine the damage due to a natural disaster in the case of a reactive approach, or determine the benefits of specific actions to reduce exposure to such natural disasters in the case of a proactive approach.

The estimation of Human Capital is used for the same purpose as it serves to determine the Value of a Statistical Life - VSL.

In this study, I propose an approach to Human Capital for the monetary quantification of the benefits produced by seismic reduction interventions in the historic centre of Brisighella with particular reference to the effects on the population.

These interventions were identified on the basis of the seismic vulnerability map of the historic center of Brisighella presented in detail in the first part of this study, and in this paper recalled in the sub section 2.6 The quantification of the effects of seismic risk reduction interventions on Brisighella’s human capital.

The formulation of the empirical approach aimed at determining the HC as a tool to measure the effects of the earthquake on the population, and whose implementation led to the results described in the specific section, I think it is entirely consistent with the paper title, as well as with the Introduction section, for the reasons mentioned earlier.

The proposed model to support the evaluation of the benefits produced by interventions to reduce seismic vulnerability, I consider it completely consistent with both the title and the section Introduction, the results of which have not been highlighted because they need more space.

Therefore, the proposal to amend the title for the second time cannot be accepted because it would distort the meaning of this study, as well as that of modifying the Introduction section.
In addition, neither of the other two reviewers who participated in the review process of this paper highlighted these findings.

Author Response File: Author Response.pdf