Economic Assessment of Disaster Risk Reduction

This section provides a number of publicly-available papers and presentations on the use of economic analysis, particularly benefit-cost analysis, for deciding on whether to invest in disaster risk reduction programmes. The focus is on exploring the advantages of adopting a pragmatic approach to using economic analysis to better determine the net benefits of investing in disaster risk reduction.

Disaster Risk Reduction: A Global Advocacy Guide
– IFRC (2012)
Makes the case for increased investment in disaster risk reduction, including steps for implementation and challenges to address

Natural Catastrophes 2011: Analyses, Assessments, and Positions
– Munich RE (2012)
Company magazine with articles on the earthquake, flood, and nuclear accident of 2011.

Extreme Events and Insurance: 2011 Annus Horribilis
– The Geneva Association (2012)
A report from a global insurance think tank calling for greater cooperation between public and private sectors to deal with the increasing economic costs of disasters

Economic and Social Survey of Asia and the Pacific. Sustaining Dynamism and Inclusive Development, Connectivity in the Region and Productive Capacity in Least Developed Countries
– ESCAP (2011)
Regional economic and social analysis following the major natural disaster in Japan

Natural Disasters Financial Risk Management
– Swiss Re (2010)
Discusses the technical and policy implications for using disaster risk reduction financial instruments in Latin America and the Caribbean

Models of Location Choice and Willingness to Pay to Avoid Hurricane Risks for Hurricane Katrina Evacuees
– Texes A&M and Duke Universities (2010)
Study which find that perceptions of risk and damages fade, and willingness to pay to obtain protection falls over time

Synthesis Report on Efforts Undertaken to Assess the Costs and Benefits of Adaptation Options, and Views on Lessons Learned, Good Practices, Gaps and Needs
– UNFCCC (2010)
Identifies remaining gaps and needs relating both to a need for more comprehensive assessments of costs and benefits and to methodological gaps and needs encountered by adaptation researchers and planners when undertaking such assessments

Explaining Subjective Risks of Hurricanes and the Role of Risks in Intended Moving and Location Choice Models
– RTI International et al (2009)
Explores the perceptions of the risks of hurricanes and intended relocation decisions when faced with these risks. (proof copy version)

Evaluating the Costs and Benefits of Disaster Risk Reduction under Changing Climatic Conditions: A Pakistan Case Study
– ProVention et al (2008)
A case study using both social and natural science tools to answer a set of basic questions on proactive risk reduction.

Information Note No 3: Costs and Benefits of Disaster Risk Reduction
– ISDR (2007)
Provides information on the costs and benefits of disaster risk reduction, especially as it relates to climate change, development, and growing urban areas

Using Benefit-Cost Review in Mitigation Planning
– FEMA (2007)
Guidance on methods to review benefits and costs, prioritise actions both qualitatively and quantitatively

Benefit-Cost Analysis of FEMA Hazard Mitigation Grants
– Natural Hazards Review (2007)
Summarizes the results of applying benefit-cost analysis to a nationwide statistical sample of FEMA-funded mitigation activities

Cost-Benefit Analysis for Natural Disaster Management: Methodological Background
– WCDR (2005)
Presentation identifying costs and benefits of disaster risk management with case studies in Peru and Indonesia

Kobe Report Draft: Cost-Benefit Analysis for Disaster Risk Management
– ISDR (2005)
Summarises key findings from the World Convention on Disaster Reduction in Hyogo, Japan.

Benefit-Cost Analysis of Disaster Mitigation: A Review
– 
University of New Mexico (2004)
A comprehensive, critical overview of using benefit-cost analysis as a viable method for evaluating projects and investing in disaster risk reduction

Understanding the Economic and Financial Impacts of Natural Disasters: Disaster Risk Management
– World Bank (2004)
Final version of the ODI report below, comprises a state-of-the art review and three country case studies

Economic and Financial Impacts of Natural Disasters: An Assessment of Their Effects and Options for Mitigation: Synthesis Report
– ODI (2003)
Comprises a state-of-the art review and three country case studies

The Use of Benefit-Cost Analysis for Evaluation of Performance-Based Earthquake Engineering Decisions
– Pacific Earthquake Engineering Research Center (2001)
An overview of benefit-cost analysis for performance-based earthquake engineering framework and discusses the economic implications

Advantages and Limitations of Benefit-Cost Analysis for Evaluating Investments in Natural Disaster Mitigation
– IDNDR (1994)
Using various models and a case study of agriculture in St. Lucia, provides evidence that disaster mitigation can support the goals of sustainable development

Disaster-Prone Technologies, Environmental Risks, and Profit Maximization
– Kyklos (1988)
Economic analysis on profit-maximizing firms’ decisions to invest in disaster mitigation