Flood Proofing Low-Income Houses in India: an Application of Climate-Sensitive Probabilistic Benefit-Cost Analysis

Stefan Hochrainer-Stigler (), JoAnne Linnerooth-Bayer () and Junko Mochizuki ()
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Stefan Hochrainer-Stigler: IIASA - International Institute for Applied Systems Analysis
JoAnne Linnerooth-Bayer: IIASA - International Institute for Applied Systems Analysis
Junko Mochizuki: IIASA - International Institute for Applied Systems Analysis

Economics of Disasters and Climate Change, 2019, vol. 3, issue 1, No 3, 23-38

Abstract: Abstract Poor communities in high risk areas are disproportionately affected by disasters compared to their wealthy counterparts; yet, there are few analyses to guide public decisions on pro-poor investments in disaster risk reduction. This paper illustrates an application of benefit-cost analysis (BCA) for assessing investments in structural flood proofing of low-income, high-risk houses. The analysis takes account of climate change, which is increasingly viewed as an important consideration for assessing long-term investments. Specifically, the study focuses on the Rohini river basin of India and evaluates options for constructing non-permanent and permanent residential structures on a raised plinth to protect them against flooding. The estimates show a positive benefit-cost ratio for building new houses on a raised plinth, while the ratio is less than one for demolishing existing houses to rebuild on a raised plinth. Climate change is found to significantly affect the BCA results. From a policy perspective, the analysis demonstrates the potential economic returns of raised plinths for ‘building back better’ after disasters, or as a part of good housing design practice.

Keywords: Probabilistic cost benefit analysis; Flood risk; Climate change; Building back better; Low-income housing; India; C44; C53; I38 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s41885-018-0032-7

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