FEEM working papers "Note di lavoro"
2012.087

Policy-relevant Assessment Method of Socio-economic Impacts of Floods: an Italian case study


Authors: Fabio Farinosi, Lorenzo Carrera, Alexandros Maziotis, Jaroslav Mysiak, Fabio Eboli, Gabriele Standardi
JEL n.: Q2, Q25
Keywords: Risk Assessment, Flood, Economic Impacts, Social Impact, Impact Assessment

Abstract

This paper estimates the direct and indirect socio-economic impacts of the 2000 flood that took place in the Po river basin (Italy)  using a combination of Computable General Equilibrium (CGE) model and Spatial and Multi-Criteria Analysis. A risk map for the whole basin is generated as a function of hazard, exposure and vulnerability. The indirect economic losses are assessed using the CGE model, whereas the direct social and economic impacts are estimated with spatial analysis tools combined with Multi-Criteria Analysis. The social impact is expressed as a function of physical characteristics of the extreme event, social vulnerability and adaptive capacity. The results indicate that the highest risk areas are located in the mountainous and in the most populated portions of the basin, which are consistent with the high values of hazard and vulnerability. Considerably economic damages occurred to the critical infrastructure of all the sectors with the industry/commercial sector having the biggest impact. A negative variation in the country and industry Gross Domestic Product (GDP) was also reported. Our study is of great interest to those who are interested in estimating the economic impact of flood events. It can also assist decision makers in pinpointing factors that threaten the sustainability and stability of a risk-prone area and more specifically, to help them understand how to reduce social vulnerability to flood events.

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