Application of the concept of cost benefits analysis (CBA) to property level flood risk adaptation measures

Abstract

Purpose -There has been a significant increase in flooding in the UK over the past ten years. During this time, Government policy has moved from investment in flood defences towards encouraging property owners to take responsibility for reducing the impact of flooding. One of the ways in which this can be achieved is for homeowners to adapt their properties to flood risk by implementing property level flood risk adaptation (PLFRA) measures. While there has been some attempt to develop an understanding of the benefits of such measures, these previous studies have their limitations in that the intangible benefits have not been fully considered. As such, there remains a need for further development of these studies towards developing a more comprehensive understanding of PLFRA measures. It is against this background the purpose of this paper is to present a conceptual cost benefit analysis (CBA) framework for PLFRA measure. This framework brings together the key parameters of the costs and benefits of adapting properties to flood risk including the intangible benefits, which have so far been overlooked in previous studies. Design/methodology/approach -A critical review of the standard methods and existing CBA models of PLFRA measures was undertaken. A synthesis of this literature and the literature on the nature of flooding and measures to reduce and eliminate their impacts provides the basis for the development of a conceptual framework of the costs and benefits of PLFRA measures. Within the developed framework, particular emphasis is placed on the intangible impacts, as these have largely been excluded from previous studies in the domain of PLFRA measures. Findings -The framework provides a systematic way of assessing the costs and benefits of PLFRA measures. A unique feature of the framework is the inclusion of intangible impacts, such as anxiety and ill health, which are known to be difficult to measure. The study proposes to implement one of the stated preference methods (SPM) of valuation to measure these impacts, known as the willingness to pay method, as part of a survey of homeowners. The inclusion of these intangible impacts provides the potential to develop a more comprehensive understanding of the benefit cost ratio (BCR) for different stakeholders. The newly developed CBA conceptual framework includes four principal components: the tangible benefits to insurers; the tangible benefits to the government; the tangible benefits to homeowners; and the intangible benefits to homeowners. Originality/value -This tool offers the potential to support government policy concerned with increasing the uptake of PLFRA measures through increasing the information available to homeowners and thereby supporting the decision-making process.

Cost-Benefit Analysis (CBA) of Sustainable Drainage Systems (SUDS) Retrofit: a Case Study

“…The willingness-to-pay process revealed the difficulties posed in quantifying these benefits, especially the intangible benefits. Research has shown that intangible benefits by their subjective nature are difficult to quantify and are said to be more personal to the victims of flood events [8], [6], [17], [20]. It was, therefore, important to carry out this exercise in order to obtain a full understanding of the benefits of the SuDS scheme to the property owners and to propose an appropriate procedure of eliciting the intangible benefits of the scheme.…”

A review of flood impact assessment approaches for underground infrastructures in urban areas: a focus on transport systems

“…Although there is research on assessing financial losses due to pluvial flood events (Joseph et al 2014, Jenkins et al 2016, Ke et al 2016, all these approaches take into account only the damage to property and buildings in a general context, and not focusing on the infrastructure and service of the Metro system in the cities where these studies have been carried out. The costs related to the loss of human life and injuries due to flood events, since it depicts a significant challenge its accurate quantification, have not been appropriately studied, remains as the source of the most relevant losses at the economic and social level.…”

A Conceptual Framework of Determining the Property Value Using Economic Valuation Method Towards Floods Disaster

“…House price then reveal individual preferences [23] regarding the acceptance risk [21], assuming that appropriate control for difference in the property and the location [22] are included. There are difference between prices of houses located inside and outside a specific flood risk zone [15].…”