Book Description

The study clarifies the economic consequences and effects of programs designed to protect or otherwise manage flood plains. A firm basis is established to appropriately distinguish between the source of change of a flood plain development from its economic effects. The study makes the following major findings: Where the development in the flood plain will be the same with and without the project, benefits attributable to the project will equal total damages reduced. Where there is project induced growth, the benefits attributable to the project are equal to the net increase in productivity of the economy due to the relocation of activities both inside and outside the flood plain. Benefits from project induced growth (so-called 'land enhancement' benefits) can be measured by the difference between the net income (profits) of activities which move into the flood plain with protection and the net income they could earn outside the flood plain. In the absence of direct observation of change in net income, benefits from project induced growth can be measured in terms of simulating damages reduced to new activities that would locate in the flood plain with protection. (Author).