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An economic approach to coping with flood damage
Author(s) -
Krutilla John V.
Publication year - 1966
Publication title -
water resources research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.863
H-Index - 217
eISSN - 1944-7973
pISSN - 0043-1397
DOI - 10.1029/wr002i002p00183
Subject(s) - flood myth , floodplain , flood insurance , flood control , 100 year flood , natural hazard , actuarial science , business , environmental science , water resource management , environmental planning , environmental resource management , natural resource economics , economics , geography , cartography , meteorology , archaeology
A compulsory flood loss insurance scheme is one means of achieving efficient uses of flood plain lands. Insurance premiums proportional to risk and equal to both the private and the social cost of flood plain occupance will serve as a rationing device, eliminating economically unwarranted uses of flood plain lands on the one hand, while not prohibiting uses for which a flood plain location has merit on the other hand. In addition, reduction of flood loss insurance premiums can serve as a standard to measure the economic justification of alternative flood control measures and/or discrete increments in scale of protective works or other nonstructural flood control measures. A final advantage of flood loss insurance, which no alternative in flood management possesses, is indemnification for the residual damage potential against which it is not economic to seek protection. (Key words: Economics; flood control; flood plains; floods.)