I don't quite understand what "conversion from the location specific estimate of ground motion to damage levels" means on page 9 under Model Uncertainty section. Could you explain this for me?
Suppose I told you there was an earthquake of magnitude 2.6 in Saint-Colomban Quebec. How would an earthquake model process that information? Well, the model would have to somehow convert the magnitude of an earthquake in that location into a loss distribution that can be used by the model. That conversion involves uncertainty. One model might convert a 2.6 magnitude earthquake to a loss distribution with a mean of $1 million, but another model might come up with a mean of $2 million.
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Suppose I told you there was an earthquake of magnitude 2.6 in Saint-Colomban Quebec. How would an earthquake model process that information? Well, the model would have to somehow convert the magnitude of an earthquake in that location into a loss distribution that can be used by the model. That conversion involves uncertainty. One model might convert a 2.6 magnitude earthquake to a loss distribution with a mean of $1 million, but another model might come up with a mean of $2 million.