Flooded Cities

Centre for Economic Performance Discussion Paper No. 1398:

This paper analyzes the effect of large scale floods, which displaced at least 100,000 people each, in over 1,800 cities in 40 countries, from 2003 - 2008. The authors conduct their analysis using spatially detailed inundation maps and night lights data spanning the globe's urban areas. They find that low elevation areas are about 3 - 4 times more likely to be hit by large floods than other areas, and yet they concentrate more economic activity per square kilometre. When cities are hit by large floods, the low elevation areas also sustain more damage, but like the rest of the flooded cities they recover rapidly, and economic activity does not move to safer areas. Only in more recently populated urban areas, flooded areas show a larger and more persistent decline in economic activity. These findings have important policy implications for aid, development and urban planning in a world with rising urbanization and sea levels.