This paper examines whether economic activity relocates away from areas that are at high risk of recurring shocks. It uses the context of floods, which are among the costliest and most common natural disasters; over the past 30 years, ﬂoods worldwide killed more than 500,000 people and displaced over 650 million. 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 conducted their analysis using spatially detailed inundation maps and night lights data spanning the globe’s urban areas. They found 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 kilometer. 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 do 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.
This work is part of the Research on Growth and Urbanisation in Low Income Countries programme
Adriana Kocornik-Mina, Thomas K.J. McDermott, Guy Michaels, Ferdinand Rauch (2016) Flooded Cities. Washington, DC: World Bank