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Value is 0.893 (col. 3)

The difference is 0.210 (col. 4). Thus, this rectangle is 0.21% high. Average of the two and length of the rectangle is $591,158,000 (col. 6). Value is 0.893 (col. 3). Damage is $581,244,000. {. Damage is $601,072,000. Value is 0.683 (col. 3). The area of this rectangle is $1,241,000 in

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Value is 0.893 (col. 3)

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  1. The difference is 0.210 (col. 4). Thus, this rectangle is 0.21% high. Average of the two and length of the rectangle is $591,158,000 (col. 6). Value is 0.893 (col. 3) Damage is $581,244,000 { Damage is $601,072,000 Value is 0.683 (col. 3) The area of this rectangle is $1,241,000 in expected annual dollars (col. 7).

  2. And so on • Imagine repeating this as many times as necessary to estimate the area under the entire curve • The smaller (And more numerous) the rectangles the better the estimate of expected annual damages • Add up all the column 7 rectangles to obtain column 8’s cumulative expected annual damages

  3. EAD—The Area Under the Curve • Begin with a damage-frequency curve • Calculate the area under the curve by inscribing rectangles • Calculate area of rectangle • Add up all the rectangular areas • More sophisticated algorithms are used for more precise programs but this example gives you the idea

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