This section describes how we calculate the distribution of average annual equivalent damage (AAED). See Average Annual Equivalent Damage to learn how an instance of AAED is calculated.
The AAED distribution is calculated by assuming perfect correlation between the distribution of base year expected annual damage (EAD) and future year EAD. In other words, the first percentile of base year EAD and the first percentile of future EAD are used to calculate the first percentile of AAED.