Economic efficiency of community-based flood risk management: An empirical study from Indonesia

Abstract

Flood risk management are considerably influenced by several factors, such as all sources of flooding, social circumstances, policy and even the potential for local economic growth. To encourage government, business, community and other parties to continue investing in flood risk management projects, it is necessary to give understanding that the projects can also provide economic benefits through systematic predictions and assessments of costs, benefits and social values, especially on flood-affected communities. This study aims: (1) to develop knowledge and understanding on small-scale flood risk management project in Malang City, Indonesia, and; (2) to assess the economic efficiency of the project investment considering all benefits, both monetary and non-monetary. The research method is a mixed method combining quantitative questionnaires (N = 53 from 162 families) with qualitative in-depth interviews (N = 10) and field observations. The runoff discharge and the inundation depth were calculated using hydrology and hydraulic analysis, while the economic efficiency was analysed using cost benefit analysis (CBA). The results show that the community-based flood risk management system can reduce the flood risk up to 30% compared to before the implementation of that system. This system also provides direct financial benefits through the use of drainage channels for fish and vegetables farming. It causes the increase of the net social benefit about 70–90% and the net present value (NPV) greater than zero (NPV > 0). Therefore, the project investment is recommended to be proceeded.