Publication:
Efficiency and Equity in Urban Flood Management Policies: A Systematic Urban Economics Exploration

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dc.contributor.authorLiotta, Charlotte
dc.contributor.authorHallegatte, Stéphane
dc.contributor.authorAvner, Paolo
dc.date.accessioned2023-02-13T21:13:16Z
dc.date.accessioned2023-03-06T15:50:54Z
dc.date.available2023-02-13T21:13:16Z
dc.date.available2023-03-06T15:50:54Z
dc.date.issued2023-02
dc.description.abstractFlood exposure is likely to increase in the future as a direct consequence of more frequent and more intense flooding and the growth of populations and economic assets in flood-prone areas. Low-income households, which are more likely to be located in high-risk zones, will be particularly affected. This paper assesses the welfare and equity impacts of three flood management policies—risk-based insurance, zoning, and subsidized insurance—using an urban economics framework with two income groups and three potential flood locations. The paper shows that in a first-best setting, risk-based insurance maximizes social welfare. However, depending on flood characteristics, implementing a zoning policy or subsidized insurance is close to optimal and can be more feasible. Subsidizing insurance reduces upward pressure on housing rents but increases flood damage, and is recommended for rare floods occurring in a large part of a city. Zoning policies have the opposite effect, avoiding damage but increasing housing rents, and are recommended for frequent floods in small areas. The social welfare impact of choosing the wrong flood management policy depends on the location of floods relative to employment centers, with flooding close to employment centers being particularly harmful. Implementing flood management policies redistributes flood costs between high- and low-income households through land markets, irrespective of who is directly affected. As such, they are progressive in terms of equity, compared to a laissez-faire scenario with myopic anticipations, in the more common scenario where poorer populations are more exposed to urban floods. But their impacts on inequality depend on flood locations and urban configuration. For instance, in a city where floods are centrally located and low-income households live in the city center, subsidized insurance would mitigate a surge in inequality, whereas a zoning policy could substantially increase inequalities.en
dc.identifierhttp://documents.worldbank.org/curated/en/099527102062332327/IDU0e0eee23a036c7040f20898009edeafa81b36
dc.identifier.doihttps://doi.org/10.1596/1813-9450-10292
dc.identifier.urihttps://hdl.handle.net/10986/39409
dc.languageEnglish
dc.language.isoen
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Papers;10292
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectDISASTER RISK MANAGEMENT
dc.subjectURBAN FLOODS
dc.subjectURBAN ECONOMICS
dc.subjectLAND USE ZONING
dc.subjectSUBSIDIZED INSURANCE
dc.subjectRISK-BASED INSURANCE
dc.subjectWELFARE
dc.subjectINEQUALITY
dc.subjectCLIMATE CHANGE
dc.titleEfficiency and Equity in Urban Flood Management Policiesen
dc.title.subtitleA Systematic Urban Economics Explorationen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleEfficiency and Equity in Urban Flood Management Policies: A Systematic Urban Economics Exploration
okr.date.disclosure2023-02-06
okr.date.doiregistration2025-04-10T11:21:51.510106Z
okr.date.lastmodified2023-02-06T00:00:00Zen
okr.doctypeWorking Papers
okr.doctypeWorking Papers::Policy Research Working Papers
okr.docurlhttp://documents.worldbank.org/curated/en/099527102062332327/IDU0e0eee23a036c7040f20898009edeafa81b36
okr.guid099527102062332327
okr.identifier.doi10.1596/1813-9450-10292
okr.identifier.externaldocumentumIDU-e0eee23a-36c7-40f2-8980-9edeafa81b36
okr.identifier.internaldocumentum33996426
okr.identifier.reportWPS10292
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099527102062332327/pdf/IDU0e0eee23a036c7040f20898009edeafa81b36.pdfen
okr.topicCommunities and Human Settlements::Urban Housing and Land Settlements
okr.topicUrban Development::Hazard Risk Management
okr.topicUrban Development::Municipal and Civil Engineering
okr.topicUrban Development::Urban Poverty
okr.topicWater Resources::Flood Control
okr.topicEnvironment::Climate Change Impacts
okr.unitClimate Change-D1-GFDRR-IBRD (GFDRR)
relation.isAuthorOfPublicationaba5095c-0b26-4b6b-a711-2f6efb69a279
relation.isAuthorOfPublication.latestForDiscoveryaba5095c-0b26-4b6b-a711-2f6efb69a279
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