Potential economic losses from damages to structures due to earthquakes can reach billions of dollars in densely populated areas. For instance, the total direct economic losses of $25 billion due to damaged buildings was paid by government and private insurance sources for recovery and reconstruction in California following the 1994 Northridge earthquake. A study by Air Worldwide (2013) Risk Company, commissioned by the Insurance Bureau of Canada, shows that there are chances of major earthquakes in British Columbia and Quebec with estimated damage costs of $70B and $60B respectively.

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Economic losses due to nonstructural damage may also be significant following a seismic event. During the 1994 Northridge earthquake, nonstructural damage accounted for about 50% of the total loss of approximately $18.5 billion due to building damage (Kircher, 2003). After the 1971 San Fernando earthquake, it was found that damage to contents and the interior and exterior finishes resulted in 97% of the total economic loss while structural damage was limited to only 3% (FEMA E-74). As a result of past earthquake losses and the level of investment in nonstructural components and contents, considerable attention has been paid recently to develop a better understanding of the seismic behavior of nonstructural components. It is also recognized that damage to these elements may pose threat to life safety and impair functionality of a structure.