Floods, flood policies and changes in welfare and inequality: Evidence from Germany
Miguel A. Tovar Reaños
Ecological Economics, 2021, vol. 180, issue C
Floods in Germany have caused significant economic damage and are expected to become more frequent. The economic damage expected as a result of floods will affect households differently across income levels. A method, rooted in economic theory, is proposed to estimate changes in household welfare and income inequality resulting from expected flood damage. It is found that welfare losses after floods disproportionately harm low income households and increase inequality by 0.14%. Families with dependent children and householders of retirement age in the lowest income quartile are the most affected. In order to collect additional resources to cover the cost of the financial relief, the of additional income, real estate and energy taxes are investigated. These instruments yield a reduction in income inequality. It is also shown that rewarding investment in mitigation and insurance, and supporting low income households can be jointly achieved when re-allocating additional energy-tax revenues.
Keywords: Distributional effects; Microsimulation; Flood risk; Government policy (search for similar items in EconPapers)
JEL-codes: D12 H23 Q52 Q58 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:180:y:2021:i:c:s0921800919317136
Access Statistics for this article
Ecological Economics is currently edited by C. J. Cleveland
More articles in Ecological Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().