Flood Protection and Land Value Creation : Not All Resilience Investments Are Created Equal
This paper investigates the land value creation potential from flood mitigation investments in a theoretical and applied setting, using the urban area of Buenos Aires as a case study. It contributes to the literature on the wider economic benefits...
| Main Authors: | , , , |
|---|---|
| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/489851627570942811/Flood-Protection-and-Land-Value-Creation-Not-All-Resilience-Investments-Are-Created-Equal http://hdl.handle.net/10986/36055 |
| Summary: | This paper investigates the land value
creation potential from flood mitigation investments in a
theoretical and applied setting, using the urban area of
Buenos Aires as a case study. It contributes to the
literature on the wider economic benefits of government
interventions and the dividends of resilience investments.
Using a simple urban economics framework that represents
land and housing markets, it finds that not all flood
mitigation interventions display the same potential for land
value creation: where land is more valuable (city centers
for example), the benefits of resilience are higher. The
paper also provides ranges for land value creation potential
from the flood mitigation works in Buenos Aires under
various model specifications. Although the estimates vary
largely depending on model parameters and specifications, in
many cases the land value creation would be sufficient to
justify the investments. This result is robust even in the
closed city configuration with conservative flood damage
estimates, providing that the parameters remain reasonably
close to the values obtained from the calibration. Finally,
acknowledging that fully calibrating and running an urban
simulation model is data greedy and time intensive—even a
simple model as proposed here—this research also proposes
reduced form expressions that can provide approximations for
land value creation from flood mitigation investments and
can be used in operational contexts. |
|---|