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The torsional modification factor modifies the Torsional Constant (J) of a member. J is equal to the
Polar Moment of Inertia for a circular section, however, it varies for other sections. E.g. for a
rectangular section (with height (h)/width (b) = 2) its value is J = 0.229(h)(b)^3. The significance of
Torsional Constant (J) is that when J is multiplied with Shear Modulus (G) it gives Torsional
Rigidity. You will have to see books on Advanced Mechanics of Materials to get a more in depth
knowledge on this.
Coming to its value modification in ETABS, if J is kept as 1, the member will take all the torsion it is
subjected to by the loading. Then you will have to design the member for this torsion. However, if
you want to redistribute the torsional stresses to some other member e.g. a beam is connected to a
slab or a wall and you want the torsional stresses in the beam to be redistributed to the slab or wall
then you can set a very low Torsional Modification Factor value e.g. 0.01 for the beam. This will set
the beam torsional stiffness to almost zero which means it will not be able to take any torsional
stresses, which will be distributed to the connected members i.e. wall or slab whichever is the
case. In this case you will have to design the member to which the stresses have been distributed
considering the increased stresses induced in it.
The important point here is that you must be sure before changing this factor what you are doing is
correct in the physical world. For example if you set T=0.01 for a beam then although you will not
have to design it for torsion and your mathematical model is all nice and cozy, but in the real world
it might mean that an ugly crack appears in the beam in the process of stress re-distribution. So be
careful.