Elisabetta Maria Venco (p), Massimiliano De Rose

Hiroyuki Shibusawa

Floods, and the so often associated landslides, are natural hazards; deaths and damages resulting from the interaction with human being, goods, and human activities are unnatural disasters. The agglomeration of people, assets and economic activity make urban settlements particularly vulnerable to natural hazards and, therefore, disasters.
The research will present some case studies to highlight how the territory’s features and the built environment can amplify the economic impact and the overall coast, reducing, at the same time, the communities’ resilience, and cancel the ability to absorb even low intensity flood events.
The examples concern small towns in the Province of Como (northern Italy), located along the banks of the Como Lake: in July 2021, in the small city of Laglio (about 900 inhabitants on the west side of Como Lake), ten days of bad weather caused damages amounting to 67 million euros; during the same period, in Blevio, a town with just over 1,000 inhabitants on the east side of the Como Lake, the amount of damage was quantified at 16 million euros.
As defined with the Disaster Risk Management Cycle, there are different phases associated with the triggering of a possible disastrous event. We can summarize in 1) preparedness, prevention, and mitigation phase; 2) emergency management and response phase; 3) rehabilitation and recovery phase. The research focuses on an investment analysis associated with flood events management.
After an introduction on the main relevant topic related to flood risk management, the paper will highlight, through the in-depth analysis of the examples cited above, the need for public administrations and communities to invest in territorial resilience and prevention strategies and actions, underling that the main aim for public administration should be a precise and careful plan towards a progressive shift of investments from post-event to pre-event.

Jonas Hahn (p), Chiara Kuenzle, Cay Oertel, Jens Hirsch

Elisabetta Maria Venco

Natural hazards pose significant risks for buildings and, as such, investors and their property portfolios. Aside of rising sea levels as one consequence of climate change, one of the most significant sources in this context are extreme weather events, especially flood events from heavy rain and related externalities such as landslides. This study aims to analyze whether retail property markets in Singapore consider flood risk in inherent pricing mechanisms. We identify properties within distinct flood-prone areas and include several control variables from property price models toaccount for hedonic pricing characteristics. Based on 6,322 address-level observations of transaction prices in Singapore, we estimate an OLS as well as a Generalized Additive Modelwith geospatial components to account for the pricing mechanisms. We identify a statistically significant price discount of 13.5% c.p. on average from flood risk within the defined flood-prone area. Furthermore, the model delivers insights into market dynamics and the impact of low or high energy efficiency on pricing in retail properties. We conclude that, while Singapore has implemented several measures in terms of flood risk management, the retail property market still accounts for potential damages or inconveniences from flood events with a measurable discount on transaction prices.

Hiroyuki Shibusawa (p), Takeshi Ichinose, Mingji Cui

Jonas Hahn

In recent years, typhoons and other extreme weather events have caused flood damage, which has become increasingly severe. In addition to direct damage, floods also cause indirect damage. The damage is caused indirectly through the supply chain. This study examines a method to evaluate the economic damage that spills over into the affected areas as they recover. A simulation analysis is conducted for the three Tokai prefectures and other regions in Japan to clarify the impact of economic damage and the recovery process. Using a dynamic inter-regional input-output model, we perform simulation analysis for cases in which a single basin is affected by a disaster and cases in which multiple basins are affected simultaneously. The analysis reveals that the rate of change in output value was the largest in Gifu Prefecture, and in terms of damage by sector, the mining and manufacturing industries suffered the greatest damage. In terms of direct damage, Aichi Prefecture showed the same level of damage as Gifu Prefecture. In terms of indirect damage, there was a ripple effect even in areas such as Tokyo that were not directly affected by the earthquake. The scale of damage was larger in the combined case than in the single case, and recovery tended to be prolonged. The results of this research will provide useful information for regional resilience policies.
Keywords: Flood Risk, Economic Damage, Spillover, Resilience, Input-Output Analysis
JEL Classification: Q54, R15