Abstract
The expected annual damge is the most frequently used index of the impact of flooding at a site. However, estimates of expected annual damages are very uncertain as a result of uncertainties in both the estimation of the flood frequency relationship from limited data and the relationships between magnitude and damage. Computer simulation experiments using synthetic flood peak data and fixed magnitude‐damage functions have shown that the sampling distribution of estimates of expected annual damages is highly skewed to a degree depending on the form of the damage function, and most importantly, that bias in the estimates is most closely related to error in the estimated probability at which damage begins. The use of expected probability leads to a very significant increase in bias in the estimation of expected annual damages.
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