A CASE FOR OR AGAINST NEW ORLEANS 1
Module 5- Assignment 1 The Case for or Against New Orleans
Sometimes one’s choices may involve catastrophic decisions and bear great risk and yet there can be no
clear answer. For example, if a person gets a divorce, shutters a plant, sells a losing investment, or
closes their business, will he or she be better off? The following case incorporates nearly all of the
material you have covered this far and presents an example of one such choice where nearly all of the
alternatives have a significant downside risk.
Review the following information from the article “A Cost-Benefit Analysis of the New Orleans Flood
Protection System” by Stéphane Hallegatte (2005):
 Hallegatte, an environmentalist, assigns a probability (p) of a Katrina-like hurricane of 1/130 in his
cost-benefit analysis for flood protection. However, the levees that protect New Orleans also put
other regions at greater risk. You may assume the frequency of other floods is greater than Katrina-
like events (Vastag & Rein, 2011).
 The new levees that were built in response to Katrina cost approximately fourteen billion dollars
(in 2010). This is in addition to the direct costs of Katrina (eighty-one billion dollars in 2005).
 50 percent of New Orleans is at or below sea level.
 A 100-year event means that there is a 63 percent chance that such an event will occur within a
100-year period.
Part A
 Analyze the economics of New Orleans in light of the above parameters and develop your own
Cost-Benefit Analysis (CBA) for rebuilding.
 Evaluate the value of the CBA for each constituency and integrate these estimates into a
scenario model and/or decision tree. Analyze the results.
 Clearly each of these constituencies may both overlap and be prey to a variety of group dynamics
internally. For one of these options, discuss the decision pitfalls to which they may be susceptible
and make a recommendation on how to alleviate these pressures.
 Starting with your CBA, estimate the relevant expected utility for the interested constituencies.
Part B
 Make a case for or against rebuilding the city of New Orleans. This should be an executive
summary be concise and brief. Include exhibits.
 Whether you are for or against, discuss how social heuristics could be used to your advantage,
both ethically and unethically, in making your case. You may choose to fill the role
 Write an 8–12-page report in Word format. Apply APA standards to citation of sources. Use
proper spelling and grammar throughout, and keep the text legible and balanced with visuals. Use
the following file naming convention: LastnameFirstInitial_M5_A1.docof one of the constituents, if
you prefer.

A CASE FOR OR AGAINST NEW ORLEANS 2
Abstract
This paper will look at a number of contributing factors that will them make a
recommendation for rebuilding or not rebuilding New Orleans in the wake of
Hurricane Katrina. This recommendation will be presented in two parts, Part A will
analyze the economics of New Orleans and evaluate the value based on a Cost-Benefit
Analysis in order to make a firm recommendation. By analyzing a Cost-Benefit
Analysis, it will be represented by the following constituents: the residence of New
Orleans, the residents of the surrounding floods plains, the Mayor of New Orleans, the
federal government agency known as Federal Emergency Management Agency (FEMA)
and the taxpayers.
This paper will look at scenario models, risk management models, and decision
trees to support the decisions and analysis for the recommendation to rebuild or not to
rebuild New Orleans.
Hurricane Katrina took an enormous toll on the residents of New Orleans. Over
1200 lives were lost and countless injuries were suffered. The loss of revenue from the
shutdown of businesses, loss of homes and possessions of residents caused much pain
and human suffering. This paper will conclude with an executive summary which will
summarize the recommendation for or against the rebuilding of New Orleans.

A CASE FOR OR AGAINST NEW ORLEANS 3
Module 5- Assignment 1: The Case for or Against New Orleans
Background
Prior to Hurricane Katrina, New Orleans was a booming economy that was based on its
tourism. The city had a lot of offerings from the many restaurants, festivals, to the great
weather. Because of these positive attributes, New Orleans tourism was a thriving
market. There were additional economies for New Orleans, which were the mining
industry, transportation industries, and warehousing industries that were based along
its waterways. New Orleans was is also one of the largest ports in the world, as more
products came through this port than any other port in the world. Additionally, there
are many colleges in the area that add to the economic bottom line of the city. The
culture of Jazz, Blues, Creole cooking and Gumbo are a large part of the history, which
is the melting pot of culture of New Orleans.
Katrina hit many southern cities. Louisiana, Texas, and Mississippi were all hit
but the most damage occurred in New Orleans. With the city mostly under sea level,
this presented a large part of the problem when Hurricane Katrina hit. The majority of
the city was flooded. More than $200 billion dollars in damages were estimated. The
loss of life, property, and business were devastating on the city of New Orleans. This
natural disaster disturbed the economic system of New Orleans as well as markets all
around the United States (U.S.). The trending effect was a loss of 100,000 jobs in ten

Module 5- Assignment 1 The Case for or Against New Orleans

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