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Flood Risk Acceptability and Economic Value of Evacuation

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  • Guofang Zhai
  • Saburo Ikeda

Abstract

The economic value of evacuation and its relationship with flood risk acceptability in Japan were studied by applying the contingent valuation method (CVM). Flood risk acceptability here refers to the extent to which people accept the occurrence of floods, in terms of scale and frequency. The economic value of evacuation refers to people's willingness to pay (WTP) for avoiding evacuation inconvenience because of its inconvenience and the potential for certain losses as a result of evacuation. Our main finding was that over half of the people (56%) who actually evacuated in a real flood situation reported inconvenience. The greatest inconveniences were the shortages of information and food. Evacuation inconvenience can be regarded as an important factor causing the low rate of evacuation in Japan. The WTP for avoiding current inconvenience was approximately half of the estimated economic value of evacuation, implying that the current budget for evacuation is too small and should be increased to improve the conditions of evacuation sites. The economic value of evacuation can be taken into consideration in the risk assessment process in order to evaluate the efficiency of risk reduction measures. Flood risk acceptability and home ownership are two major statistically significantly determinants of the WTP. Considering that those who accept flood risk have a lower WTP for flood risk control (ex ante measures) than those who reject it, it is reasonable to think that there may be a tradeoff between the public WTPs for ex ante or ex post measures.

Suggested Citation

  • Guofang Zhai & Saburo Ikeda, 2006. "Flood Risk Acceptability and Economic Value of Evacuation," Risk Analysis, John Wiley & Sons, vol. 26(3), pages 683-694, June.
    • Handle: RePEc:wly:riskan:v:26:y:2006:i:3:p:683-694
    DOI: 10.1111/j.1539-6924.2006.00771.x
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    References listed on IDEAS

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    1. Leonard Shabman & Kurt Stephenson, 1996. "Searching for the Correct Benefit Estimate: Empirical Evidence for an Alternative Perspective," Land Economics, University of Wisconsin Press, vol. 72(4), pages 433-449.
    2. Guofang Zhai & Teruki Fukuzono & Saburo Ikeda, 2003. "An Empirical Model of Efficiency Analysis on Flood Prevention Investment in Japan," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 15(3), pages 238-254, November.
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    5. Ming Wang & Chuan Liao & Saini Yang & Weiting Zhao & Min Liu & Peijun Shi, 2012. "Are People Willing to Buy Natural Disaster Insurance in China? Risk Awareness, Insurance Acceptance, and Willingness to Pay," Risk Analysis, John Wiley & Sons, vol. 32(10), pages 1717-1740, October.
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