Value of Flood Damage
Attributes
Medium: Water
Country: Thailand
Analytical Framework(s): Damage Valuation
Study Date: 2013
Publication Date: 2014
Major Result(s)
| Resource/Environmental Good | THB (2013) |
THB (2014)1 |
USD (2014)2 |
|---|---|---|---|
| average damage to poor households3 | 74,010.30 | 75,527.51 | 2,294.73 |
| average damage to middle-income households4 | 250,113.00 | 255,240.32 | 7,754.88 |
About the Inflation Adjustment: Prices in Thailand (THB) changed by 2.05% from 2013 to 2014 (aggregated from annual CPI data), so the study values were multiplied by 1.02 to express them in 2014 prices. The study values could be expressed in any desired year (for example, to 2025) by following the same inflation calculation and being sensitive to directional (forward/backward) aggregations using your own CPI/inflation data.
Study Note: The households' flood experience was represented by three variables: (1) damages incurred; (2) compensation received; and (3) level of the flood depth inside their houses and if this led to evaluation.
Study Details
Summary: This paper looked into factors that drive demand for flood insurance based on a survey of 600 households almost one year after the July-December 2011 flood in Thailand. It also evaluated coverage and flood depth as the two salient features of the National Catastrophe Insurance Fund (NCIF), which was established in March 2012 in response to the 2011 Thailand flooding. The main findings of this study have been that the lower income neighbourhood in all the three districts was harder hit by the 2011 flood in terms of both flood depth and duration. The percentages of households willing to purchase flood insurance were lower than expected particularly when considering that flood insurance coverage would have been higher than compensation received. This study found that despite the bad experience from Bangkok flooding and that over half believed that there is more than 70% chance that a flood as severe as 2011 will reoccur in the next five years, only 22% of low income households and 37% of middle income households would be willing to purchase disaster insurance. Factors affecting this willingness include: having prior information about the NCIF flood insurance, age and, value of house with households having younger decision-makers, higher house prices and being more likely to purchase flood insurance.
Site Characteristics: Household surveys were conducted in three areas in Bangkok and two vicinity provinces which were among the hardest hit by the 2011 flood, namely, in Nonthaburi, Pathum Thani, and Bangkok. In these provinces, three districts were purposively selected: Bang Bua Thong District (Nonthaburi located west of Bangkok), Klong Luang District (Pathum Thani located north of Bangkok), and Don Muang District (northern Bangkok). They were selected because of the difference in the speed of the rise in the depth of the water, which might affect extent, and nature of flooding damages. In Bang Bua Thong (Nonthaburi) the floodwaters rose to their maximum level within 24 hours. In Klong Luang (Pathum Thani) the floodwaters rose more gradually, 0.5 m in one week. The Don Muang District of Bangkok flooded before the other two study sites and water rose at a moderate pace (0.8 meters within 24 hours).
Comments: Estimates of the economic costs covered three time periods: (1) ex-ante preventative costs referring to measures households took to try and prevent or reduce the extent of the damages such as parking cars in alternate locations and purchased goods to prepare for the flood such as construction materials, sandbags, and small boats; (2) during the flood costs included coping costs such as increased expenses to commute to work and home, increased food expenditure. For those who evacuated, there was also an increase in accommodation and other necessities. Also computed into monetary value was increased travel time to commute between home and the work place and for some who was not able to work or had to temporarily close down businesses, foregone income; and (3) ex-post losses after the flood included expenditures for car repairs and to repair, clean, and replace housing and other property damage.