Assessing Socioeconomic Resilience to Floods in 90 Countries

29 Pages Posted: 17 May 2016

See all articles by S. Hallegatte

S. Hallegatte

World Bank

Mook Bangalore

World Bank

Adrien Vogt-Schilb

CIRED, Centre international de recherche sur l’environnement et le développement

Date Written: May 9, 2016

Abstract

This paper presents a model to assess the socioeconomic resilience to natural disasters of an economy, defined as its capacity to mitigate the impact of disaster-related asset losses on welfare, and a tool to help decision makers identify the most promising policy options to reduce welfare losses due to floods. Calibrated with household surveys, the model suggests that welfare losses from the July 2005 floods in Mumbai were almost double the asset losses, because losses were concentrated on poor and vulnerable populations. Applied to river floods in 90 countries, the model provides estimates of country-level socioeconomic resilience. Because floods disproportionally affect poor people, each $1 of global flood asset loss is equivalent to a $1.6 reduction in the affected country's national income, on average. The model also assesses and ranks policy levers to reduce flood losses in each country. It shows that considering asset losses is insufficient to assess disaster risk management policies. The same reduction in asset losses results in different welfare gains depending on who benefits. And some policies, such as adaptive social protection, do not reduce asset losses, but still reduce welfare losses. Asset and welfare losses can even move in opposite directions: increasing by one percentage point the share of income of the bottom 20 percent in the 90 countries would increase asset losses by 0.6 percent, since more wealth would be at risk. But it would also reduce the impact of income losses on wellbeing, and ultimately reduce welfare losses by 3.4 percent.

Keywords: Economic Theory & Research, Climate Change and Health, Climate Change and Environment, Inequality, Industrial Economics, Non Governmental Organizations, Economic Growth, Social Protections & Assistance, Economics and Institutions, Science of Climate Change, Public Sector Management and Reform

Suggested Citation

Hallegatte, Stephane and Bangalore, Mook and Vogt-Schilb, Adrien, Assessing Socioeconomic Resilience to Floods in 90 Countries (May 9, 2016). World Bank Policy Research Working Paper No. 7663. Available at SSRN: https://ssrn.com/abstract=2781020

Stephane Hallegatte (Contact Author)

World Bank ( email )

1818 H Street NW
Washington, DC 20433
United States

Mook Bangalore

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Adrien Vogt-Schilb

CIRED, Centre international de recherche sur l’environnement et le développement ( email )

France

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