Assessing Effects of Flood Risk Reduction Investment Considering Income Levels

Abstract:

Flooding has a greater impact in developing countries. Flooding not only causes direct damage, such as house or asset damage, but also indirect damage such as hindering social development or expanding poverty. One of the causes of severe flood damage in developing countries is that investment in disaster risk reduction is insufficient and more money is spent on emergency response or reconstruction.

Existing methods for assessing the effectiveness of investments in disaster risk reduction often evaluate the effectiveness in terms of direct damage reduction. However, such methods fail to take into account the indirect damage that floods cause to society, such as hindering social development or increasing poverty.

Here, we show the novel method to estimate the effects of investments in disaster risk reduction in detail by modeling the interactions between floods and human on a household basis. With regard to interactions between floods and human, we consider the impact of flood damage on risk perceptions, household income, local economies, and population, and their feedback. Furthermore, by setting different conditions depending on the income level of the household, we represent the indirect damage that cannot be captured by the amount of damage alone.With regard to investment in disaster risk reduction, 256 combinations of the six measures are considered and evaluate each combination in terms of the avoided damage cost, social development and the cost of the measures.

We conducted a case study in Myanmar. Our results demonstrate what combination of flood risk reduction measures are appropriate in the target area and people at which income levels benefit from the measures. It is difficult to understand the impact on the poor, who are seriously affected by their lives, even if the damage amount is small, by the conventional evaluation methods. In our method, however, it is possible to include flood damage to the poor in the evaluation by calculating damage by income level. It will help to clarify the impact of investment in disaster risk reduction on social development and poverty reduction and promote investment in developing countries.