Assessing the Economic Benefits of Flood Defenses: A Repeat-Sales Approach

Secondary benefits of urban flood protection

The combined effects of urbanization and climate change put a large portion of the population at risk from pluvial, fluvial, and coastal flooding. To continue to strive for sustainable development, cities will need to protect flood-prone areas, but this will require significant investments in both green and grey infrastructure solutions. Yet, a significant financing gap will need to be bridged to increase cities' resilience. The decision as to which flood protection intervention to finance typically includes an analysis of primary costs (construction) and benefits (averted damages). However, an array of potential secondary benefits occur with increased flood protection that are often not assessed, such as increased well-being and ecosystem health. This review provides a timely overview of the secondary benefits of urban flood protection, a brief analysis of whether they have been included in cost-benefit analyses for investments in urban flood protection projects, and a discussion of methodological concerns. Of the twenty projects reviewed, fourteen make mention of secondary benefits, yet only four quantify them in their analysis. Advances in evaluation methodologies may reduce quantification challenges, but a move away from traditional cost-benefit analysis may be necessary to incorporate a full range of secondary benefits. Ultimately, we argue that a more thorough understanding of the secondary benefits of urban flood protection and their quantification methods could unlock additional financing for flood protection infrastructure, especially in urban centers of developing countries.

Risk Perception and Property Value: Evidence from Tianjin Port Explosion

This paper aims to investigate the perceived risk after the Tianjin port explosion event and its impact on property value. In addition to focusing on the relationship between homebuyers’ risk perception and property sales price, this paper also considers the risk perception of property sellers via the sale-to-list ratio. By using the difference-in-differences method and the sample from the property agent, we found that the explosion event generated a long-time effect on the public and property market in the city of Tianjin. Relative to those properties far away from the explosion site, the sales price and the sale-to-list ratio of the property near the explosion site were detected to have significant drops for the first six months after the explosion event. The temporal decrease of the relative sales price and the sale-to-list ratio are the evidence of short period overreaction from the public, which decays over time. This study demonstrates an indirect method to estimate the perceived risk of the general public and provides valuable insight into sustainable port management policies.