Definition and classification of benefits

  • Type of benefit: Flood Losses

The benefits of flood alleviation within flood risk management comprise the flood damage averted in the future as a result of plans and schemes to reduce the frequency of flooding or reduce the impact of that flooding on the property and economic activity affected, or a combination of both. Hence we need to understand the nature of flood damage losses, and also the impact of flood risk reduction and land drainage on agricultural productivity in areas liable to be affected.

It is customary to categorise flood damage and losses as direct or indirect, and by whether or not they are tangible or intangible (Parker et al., 1987, 2).

Direct damages result from the physical contact of flood water with damageable property. The magnitude of the damage may be taken as the cost of restoration of the property to its condition before the flood event, or its loss in market value if restoration is not worthwhile.

Indirect flood losses are losses caused by disruption of physical and economic linkages of the economy, and the extra costs of emergency and other actions taken to prevent flood damage and other losses. These indirect effects of floods can be suffered by productive activities and emergency services both within and beyond the area of immediate direct physical flood impact.


 Direct, indirect, tangible and intangible flood impacts, with examples



Form of losses





Damage to building and contents


Loss of an archaeological site




Loss of industrial production


Inconvenience of post-flood recovery



  • Type of benefit: Land value enhancement with flood risk reduction

Flood risk reduction may result in enhanced land values in both urban and rural areas and this can be a measure of the benefit of flood alleviation, although these values should not be added to flood losses that these areas may experience as this is double-counting the benefits.

In each case this enhancement of land values may result from the same land use becoming more profitable, as a result of the reduced hazard, measured either in terms of the greater production sustained or in terms of the rent that the land commands. Alternatively, a new land use may be possible, in the urban context perhaps allowing residential development where only recreational land existed before.

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