Part III: Historical economic losses from floods – Where does Katrina rank?

September 15th, 2005

Posted by: Roger Pielke, Jr.

In Part I and Part II of his series we discussed some of the methodological challenges in quantifying economic impacts and sought to place Katrina into the context of historical hurricanes. Katrina holds the distinction of not only being one of the most costly hurricanes on record, but also one of the most costly floods.

In its tabulation of losses from extreme weather events, the U.S. National Weather Service (NWS) has historically distinguished hurricane damages from flood damages. In a research report to NOAA on flood damage that we completed several years ago we characterized the distinction as follows:

“[Flooding includes] river and coastal flooding, rainwater flooding on level surfaces and low-gradient slopes, flooding in shallow depressions which is caused by water-table rise, and flooding caused by the backing-up or overflow of artificial drainage systems. The NWS includes damage from most types of flooding listed above, but excludes ocean floods caused by severe wind (storm surge) or tectonic activity (tsunami).” The NWS also excludes mudslides from its flood damage totals.


In that report we reanalyzed the historical flood damage record of the NWS by going into NWS archives, exploring historical media reports and cross checking federal and state damage estimates. We think the resulting dataset is the best single source of information on flood damage available in the United States. You can see it here – www.flooddamagedata.org

The data from our report can be converted to 2004 dollars by using the implicit price deflators found in Table B-3 of the Economic Report of the President (multiply 1995 dollars by 1.175 to get 2004 dollars). In millions of $2004 the ten largest flood-damage years from the period 1929-2003 are as follows:

1993: $20,039
1972 : $15,940
1997 : $10,135
1986 : $9,022
1979 : $7,920
2001 : $7,568
1996 : $7,059
1951 : $6,576
1973 : $6,134
1983 : $6,130

But as we have often discussed here, such measures can be misleading because there are profound societal changes that occur over a period of decades. One way to reduce the effects of societal changes is to look at damages per capita. Here are the top 10 flood years 1929-2003 measured on a per capita basis:

1993: $77.74
1972 : $75.94
1951 : $42.46
1997 : $37.85
1986 : $37.57
1937 : $36.11
1979 : $35.19
1965 : $30.20
1973 : $28.95
1955 : $27.31

Damage per capita still underestimates the effects of societal changes, as not only has the population changed, but it has overall become much more wealthy over time, resulting in the potential for much larger losses today than in the past. One way to further adjust the data is to look at damage per unit of national wealth. This graph (PDF) shows this data, and suggests that even as floods have increased in their total costs, their economic effects have diminished as a fraction of wealth.

We strongly encourage anyone who wants to use this data to become familiar with its strengths and limitations which are discussed here and in the publications listed below.

The flooding associated with Hurricane Katrina in New Orleans is, as we’ve discussed, a very unique case. The only parts of the total event that would be appropriate to include in this database (aside from inland flooding away from the Gulf) would likely be the levee breaks in New Orleans. And even then, if the levee breaks were determined to be the result of storm surge, then the flooding might then be judged an orange in this basket of apples.

But for the sake of discussion, let’s assume that the flooding of New Orleans is indeed classified as flood damages and not hurricane damages. At any of the estimates currently available for the costs of draining and rebuilding New Orleans, Katrina’s flooding will shatter the record for annual flood costs and per capita flood costs. Under such an allocation of costs, Katrina would likely be listed as the second most costly hurricane on record (after 1926 Miami) and the worst flood event on record. The total damages would thus be a combination of both types of loss estimates. If this seems a be convoluted, I’d agree, but we are constrained in our historical analyses by the methods used to assess damage over time. This is why great caution is needed in assessing Katrina’s damages for the purposes of comparing the event with past storms.

For more information on flood damages please have a look at the following:

http://www.flooddamagedata.org

Downton, M., J. Z. B. Miller and R. A. Pielke, Jr., 2005. Reanalysis of U.S. National Weather Service Flood Loss Database, Natural Hazards Review, 6:13-22. (PDF)

Downton, M. and R. A. Pielke, Jr., 2005. How Accurate are Disaster Loss Data? The Case of U.S. Flood Damage, Natural Hazards, Vol. 35, No. 2, pp. 211-228. (PDF)

And to see how flood damage has varied with climate trends, please see this paper:

Pielke, Jr., R.A., and M.W. Downton, 2000: Precipitation and Damaging Floods: Trends in the United States, 1932-97. Journal of Climate, 13(20), 3625-3637. (PDF)

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