Flooded Cities

Abstract

Does economic activity move away from areas that are at high risk of recurring shocks? We examine this question in the context of floods, which displaced more than 650 million people worldwide in the last 35 years. We study large urban floods using spatially detailed inundation maps and night lights data spanning the globe’s cities. We find that low-elevation urban areas are flooded more frequently, and yet they concentrate more economic activity per square kilometer. When cities are flooded, low-elevation areas recover as rapidly as those higher up. With the exception of recently populated urban areas, we find little permanent movement of economic activity in response to floods. (JEL O18, Q54, R11, R58)

Natural disasters and economic growth in Northeast Brazil: evidence from municipal economies of the Ceará State

“…For instance, Ribeiro et al (2014) show that the 2008 floods in Santa Catarina reduced industrial production by 5.1 per cent, while de Lima and Barbosa (2018) show a drop of approximately 7.6 per cent in GDP per capita. Haddad and Teixeira (2015) find that floods reduce city growth and residents' welfare in São Paulo, although economic activity in large urban centres tends to recover quickly from severe floods (Kocornik-Mina et al , 2015).…”

How did the urban land in floodplains distribute and expand in China from 1992–2015?

“…MHURD, MWR, MCA floods, ULF is usually restored in its original location (Ma et al 2016, Kocornik-Mina et al 2015. Third, ULF expansion can be accelerated by the 'levee effect'-a false sense of development safety associated with engineering protection (Cheng andLi 2015, Kates et al 2006).…”

What future for history dependence in spatial economics?

“…Heblich et al (2016) show that historical air pollution in 1880 English cities predicts income sorting patterns today. Kocornik-Mina et al (2020) show that flooded cities do not seem to adapt to this locational disadvantage, even when there are nearby safer areas.…”