Does economic development reduce disaster damage risk from floods in India? Empirical evidence using the ZINB model

Abstract

Every year, extreme climatic events cause significant losses in South Asian countries, including India. The damages due to floods have gone up, affecting the overall development of the Indian economy. The current study uses zero-inflated negative binomial and negative binomial regression approaches to evaluate whether economic growth lowers damage risk due to repeating flood occurrences for major flood-affected Indian states from 1981 to 2019. This study produces three significant findings. First, loss and damage indicators are on the rise across the country. Second, high-income states are more flood-resistant than poor states. Third, the real economic growth rate and the disaster risk follow a ‘U' shape pattern. This study concludes that real per capita gross state domestic product and urbanization rate reduce the loss and damages due to disasters, while a rise in population density, more flooded areas, and heavy rainfall enhance the damage risk. Further, our study supports the economic growth theory of J. S. Mill that there is a negative association between disasters and economic growth. From a policy perspective, this study suggests increasing expenditures under the Disaster Risk Reduction program to lower damage risk. This study also urges the integration of the developmental planning and state action plan for climate change to encounter such climatic events thoroughly. © 2022 Elsevier Ltd