Density and disasters: economics of urban hazard risk

Policy research working paper 5161:

This paper discusses what sets hazard risk in urban areas apart, provides estimates of valuation of hazard risk, and discusses implications for individual mitigation and public policy. The main conclusions are that urban agglomeration economies change the cost-benefit calculation of hazard mitigation, that good hazard management is first and foremost good general urban management, and that the public sector must perform better in generating and disseminating credible information on hazard risk in cities.

This paper is a product of the Finance, Economics, and Urban Development Department and the Environment and Energy Team, Development Research Group of the World Bank, and is part of a larger effort in the department to examine the economics of hazard risks in urban areas.