Impacts of Flooding and Flood Preparedness on Subjective Well-Being: A Monetisation of the Tangible and Intangible Impacts

We’re sorry, something doesn't seem to be working properly.

Please try refreshing the page. If that doesn't work, please contact support so we can address the problem.

Abstract

Flood disasters severely impact human subjective well-being (SWB). Nevertheless, few studies have examined the influence of flood events on individual well-being and how such impacts may be limited by flood protection measures. This study estimates the long term impacts on individual subjective well-being of flood experiences, individual subjective flood risk perceptions, and household flood preparedness decisions. These effects are monetised and placed in context through a comparison with impacts of other adverse events on well-being. We collected data from households in flood-prone areas in France. The results indicate that experiencing a flood has a large negative impact on subjective well-being that is incompletely attenuated over time. Moreover, individuals do not need to be directly affected by floods to suffer SWB losses since subjective well-being is lower for those who expect their flood risk to increase or who have seen a neighbour being flooded. Floodplain inhabitants who prepared for flooding by elevating their home have a higher subjective well-being. A monetisation of the aforementioned well-being impacts shows that a flood requires €150,000 in immediate compensation to attenuate SWB losses. The decomposition of the monetised impacts of flood experience into tangible losses and intangible effects on SWB shows that intangible effects are about twice as large as the tangible direct monetary flood losses. Investments in flood protection infrastructure may be under funded if the intangible SWB benefits of flood protection are not taken into account.

This is a preview of subscription content, log in to check access.

Fig. 1

Notes

  1. 1.

    Ordered logit models that are consistent with the ordinal interpretation were also estimated (results reported in SI.D), which provided similar results.

  2. 2.

    Other control variables may suffer from similar problems due to the SWBDs acting aggregation sources of SWB.

  3. 3.

    A drawback of this approach is that, the results are quite sensitive to how the income categories are converted into continuous values.

  4. 4.

    As Eq. (4) can also be written as \(\frac{{\partial { \ln }\left( {income} \right)}}{{\partial SWB_{x} }}\), this is approximately equal to the percentage change in income given a one unit change in x.

  5. 5.

    Moreover, there may be a connection between flood preparedness decisions and personality. Several studies find that protection motivation theory (PMT) can explain household flood preparedness decisions (e.g. Poussin et al., 2014). Personality is a factor that determines a household’s PMT evaluation (Maddux and Rogers, 1983). Heller et al. (2005) argue that the most appropriate aspect of an individual’s personality in this regard is their tendency to worry about natural hazards. We controlled for worry in our regression models by including a series of dummy variables of how concerned the respondent is with current and future flood risk.

  6. 6.

    An additional sensitivity test is conducted by including a binary variable that indicates if the individual is motivated to further reduce or manage their risk. The rationale is that an individual who is motivated to further manage and control the external issue of flood risk may not be as pessimistic as others who are not as motivated. Including this variable did not affect our main results.

References

  1. Blanchflower, D. G., & Oswald, A. J. (2004). Well-being over time in Britain and the USA. Journal of Public Economics, 88(7–8), 1359–1386.

    Article  Google Scholar 

  2. Bockarjova, M., Rietveld, P., & Verhoef, E. (2009). First results immaterial damage valuation: Value of statistical life (VOSL), value of evacuation (VOE) and value of injury (VOI) in flood risk context, a stated preference study (III). VU Amsterdam: Department of Spatial Economics, Amsterdam.

  3. Brouwer, R., & Schaafsma, M. (2013). Modelling risk adaptation and mitigation behaviour under different climate change scenarios. Climatic Change, 117(1), 11–29.

    Article  Google Scholar 

  4. Clark, A. E., & Oswald, A. J. (2002). A simple statistical method for measuring how life events affect SWB. International Journal of Epidemiology, 31(6), 1139–1144.

    Article  Google Scholar 

  5. Dolan, P., Peasgood, T., & White, M. (2008). Do we really know what makes us happy? A review of the economic literature on the factors associated with subjective well-being. Journal of Economic Psychology, 29(1), 94–122.

    Article  Google Scholar 

  6. Dumas, P., Hallegatte, S., Quintana-Sequi, P., & Martin, E. (2013). The influence of climate change on flood risks in France: First estimates and uncertainty analysis. Natural Hazards and Earth Systems Science, 13, 808–821.

    Article  Google Scholar 

  7. Ferrer-i-Carbonell, A. (2005). Income and well-being: an empirical analysis of the comparison income effect. Journal of Public Economics, 89(5–6), 997–1019.

    Article  Google Scholar 

  8. Frey, B. S., Luechinger, S., & Stutzer, A. (2009). The life satisfaction approach to valuing public goods: the case of terrorism. Public Choice, 138(3), 317–345.

    Article  Google Scholar 

  9. Heller, K., Alexender, D. B., Gatz, M., Knight, B. G., & Rose, T. (2005). Social and personal factors as predictors of earthquake preparation: the role of support provision, network discussion, negative affect, age and education. Journal of Applied Social Psychology, 35(2), 399–422.

    Article  Google Scholar 

  10. Hudson, P., Botzen, W. J. W., Feyen, L., & Aerts, J. C. J. H. (2016). Incentivising flood risk adaptation through risk based insurance premiums: trade-offs between affordability and risk reduction. Ecological Economics, 125, 1–13.

    Article  Google Scholar 

  11. Hudson, P., Botzen, W. J. W., Kreibich, H., Bubeck, P., & Aerts, J. C. J. H. (2014). Evaluating the effectiveness of flood damage mitigation measures by the application of propensity score matching. Natural Hazards and Earth Systems Science, 14, 1731–1747.

    Article  Google Scholar 

  12. IPCC (2012). Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation. Field, C.B., Barros, V., Stocker, T.F., Qin, D., Dokken, D.J., Ebi, K.L., Mastrandrea, M.D., Mach, K.J., Plattner, G.K., Allen, S.K., Tignor, M., & Midgley, P.M. (eds.). Cambridge University Press, Cambridge.

  13. Joseph, R., Proverbs, D., & Lamond, J. (2015). Assessing the value of intangible benefits of property level flood risk adaptation (PLFRA) measures. Natural Hazards, 79(2), 1275–1297.

    Article  Google Scholar 

  14. Kahneman, D., & Krueger, A. B. (2006). Developments in the measurement of subjective well-being. Journal of Economic Perspectives, 20(1), 3–24.

    Article  Google Scholar 

  15. Krueger, A. B., & Schkade, D. A. (2008). The reliability of subjective well-being measures. Journal of Public Economics, 92(8–9), 1833–1845.

    Article  Google Scholar 

  16. Kunreuther, H., & Pauly, M. (2004). Neglecting disaster: Why don’t people insure against large losses. Journal of Risk and Uncertainty, 28(1), 5–21.

    Article  Google Scholar 

  17. Kunreuther, H.C., & Pauly, M.V. (2015). Insurance decision-making for rare events: the role of emotions, NBER Working Paper, Working Paper 20886. Retrieved from: http://www.nber.org/papers/w20886, Accessed 16 May 2017.

  18. Lamond, J. E., Joseph, R. D., & Proverbs, D. G. (2015). An exploration of factors affecting the long term psychological impact and deterioration of mental health in flooded households. Environmental Research, 140, 325–334.

    Article  Google Scholar 

  19. Lucas, R. E. (2007). Adaptation and the set-point model of subjective well-being: Does SWB change after major life events. Current Directions in Psychological Science, 16(2), 75–79.

    Article  Google Scholar 

  20. Luechinger, S., & Raschky, P. A. (2009). Valuing flood disasters using the life satisfaction approach. Journal of Public Economics, 93(3–4), 620–633.

    Article  Google Scholar 

  21. MacKerron, G. (2011). SWB economics from 35,000 feet. The Journal of Economic Surveys, 26(4), 705–735.

    Article  Google Scholar 

  22. Maddux, J. E., & Rogers, R. W. (1983). Protection motivation and self-efficacy: A revised theory of fear appeals and attitude change. Journal of Experimental Social Psychology, 19(5), 469–479.

    Article  Google Scholar 

  23. Mechler, R. (2016). Reviewing estimates of the economic efficiency of disaster risk management: Opportunities and limitations of using risk-based cost–benefit analysis. Natural Hazards, 81(3), 2121–212147.

    Article  Google Scholar 

  24. Munich Re (2015). Natural disasters 2014, Munich Re NatCat Service, Retrieved from: http://www.munichre.com/site/corporate/get/documents_E-285925502/mr/assetpool.shared/Documents/5_Touch/Natural%20Hazards/NatCatService/Annual%20Statistics/2014/mr-natcatservice-naturaldisaster-2014-Loss-events-worldwide-percentage.pdf, Accessed 16 May 2017.

  25. Oswald, A. J., & Powdthavee, N. (2008). Does SWB adapt? A longitudinal study of disability with implications for economists and judges. Journal of Public Economics, 92(5–6), 1061–1077.

    Article  Google Scholar 

  26. Poussin, J. K., Botzen, W. J. W., & Aerts, J. C. J. H. (2013). Stimulating flood damage mitigation through insurance: an assessment of the French CatNat system. Environmental Hazards, 12(3–4), 258–277.

    Article  Google Scholar 

  27. Poussin, J. K., Botzen, W. J. W., & Aerts, J. C. J. H. (2014). Factors of influence on flood damage mitigation behaviour by households. Environmental Science & Policy, 40, 69–77.

    Article  Google Scholar 

  28. Poussin, J. K., Botzen, W. J. W., & Aerts, J. C. J. H. (2015). Effectiveness of flood damage mitigation measures: Empirical evidence from French flood disasters. Global Environmental Change, 31, 74–84.

    Article  Google Scholar 

  29. Powdthavee, N. (2008). Putting a price tag on friends, relatives, and neighbours: Using surveys of life satisfaction to value social relationships. The Journal of Socio-economics, 37(4), 1459–1480.

    Article  Google Scholar 

  30. Powdthavee, N., & van den Bergh, B. (2011). Putting different price tags on the same health conditions: Re-evolving the well-being evaluation approach. Journal of Health Economics, 30(5), 1032–1043.

    Article  Google Scholar 

  31. Prettenthaler, F., Kortschak, Hochrainer-Stigler, Mechler, R., Urban, H., & Steininger, K. W. (2015). Catastrophe management: Riverine flooding. In K. W. Steininger, M. Koning, B. Bednar-Friedl, L. Kranzl, W. Loibl, & F. Prettenthaler (Eds.), Economic evaluation of climate change impacts (pp. 349–366). Berlin: Springer.

    Google Scholar 

  32. Tversky, A., & Kahneman, D. (1973). Availability: A heuristic for judging frequency and probability. Cognitive Psychology, 5(2), 207–232.

    Article  Google Scholar 

  33. UNISDR (2011). Global Assessment Report on Disaster Individual flood protection. Revealing Risk, Redefining Development. Geneva.

  34. van Praag, B. M. S., Frijters, P., & Ferrer-i-Carbonell, A. (2003). The anatomy of subjective well-being. Journal of Economic Behavior & Organization, 51(1), 29–49.

    Article  Google Scholar 

  35. Wilson, M. A., & Hoehn, J. P. (2006). Valuing environmental goods and services using benefit transfer: The state-of-the art and science. Ecological Economics, 60, 335–342.

    Article  Google Scholar 

  36. Zhao, X., Lynch, J. G., & Chen, Q. (2010). Reconsidering Baron and Kenny: Myths and truths about mediation analysis. Journal of Consumer Research, 37(2), 197–206.

    Article  Google Scholar 

Download references

Acknowledgements

The research leading to these results has received funding from the EU 7th Framework Program through the project ENHANCE (Grant Agreement No. 308438) and the Netherlands Organization for Scientific Research (NWO) VIDI and VICI (016.140.067; 452.14.005) grant programs.

Author information

Affiliations

Authors

Corresponding author

Correspondence to Paul Hudson.

Electronic supplementary material

Below is the link to the electronic supplementary material.

Supplementary material 1 (DOCX 43 kb)

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Hudson, P., Botzen, W.J.W., Poussin, J. et al. Impacts of Flooding and Flood Preparedness on Subjective Well-Being: A Monetisation of the Tangible and Intangible Impacts. J Happiness Stud 20, 665–682 (2019). https://doi.org/10.1007/s10902-017-9916-4

Download citation

Keywords

  • Flooding
  • Subjective well-being
  • Intangible losses
  • Tangible losses
  • Climate change
  • Adaptation
  • Climate change adaptation