Estimating the uninsured losses due to extreme weather events and implications for informal sector vulnerability: a case study of Mumbai, India

Archana Patankar () and Anand Patwardhan ()

Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, 2016, vol. 80, issue 1, 285-310

Abstract: Extreme weather events lead to significant physical, economic and social impacts with short- and long-term consequences for affected regions. The methodologies used to assess the impacts often focus on the insured losses associated with private capital and public infrastructure. However, these estimates do not reflect the losses, monetary and non-monetary, associated with damage to uninsured assets. In addition, in the absence of systematic methods for measuring and recording impacts experienced by the informal sector—both households and small businesses—losses experienced by these segments are not reported, particularly in the developing world. This paper uses primary data collected from a survey of households and small businesses to estimate the uninsured losses due to a major flood event in the city of Mumbai, India. A detailed characterization of the losses is attempted, by disaggregating losses into monetary damage to property, physical capital, assets, equipment and inventory as well as loss of income, investment and disruption of essential services. Aggregate estimates of losses at the city level are computed and compared with the insured private and public losses traditionally reported in the literature. Our results indicate that the uninsured private losses suffered by individuals and small businesses significantly exceed the damage to public infrastructure. In the absence of insurance or government assistance, these costs represent a significant out-of-pocket expenses for the households and businesses. These findings have significant policy implications in terms of highlighting the vulnerability of the informal sector to extreme weather events in cities of the developing world. Copyright Springer Science+Business Media Dordrecht 2016

Keywords: Extreme weather event; Uninsured losses; Informal sector; Impact assessment (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://hdl.handle.net/10.1007/s11069-015-1968-3 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:nathaz:v:80:y:2016:i:1:p:285-310

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11069

DOI: 10.1007/s11069-015-1968-3

Access Statistics for this article

Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards is currently edited by Thomas Glade, Tad S. Murty and Vladimír Schenk

More articles in Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards from Springer, International Society for the Prevention and Mitigation of Natural Hazards
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().