Examining direct and indirect flood damages in residential and business sectors through an empirical lens

Investment to reduce flood risk for social and economic wellbeing requires quantitative evidence to guide decisions. Direct and indirect flood damages at individual household and business building levels were assessed in this study using multivariate analysis with three groups of flood damage attributes, i.e., flood characteristics, socioeconomic conditions, and building types. A total of 172 and 45 respondents from residential and commercial buildings were gathered through door-to-door interviews at areas in Peninsular Malaysia that were pre-identified to have frequently flooded. Two main findings can be drawn from this study. First, flood damage is greatly contributed by high-income households and businesses, despite them being less exposed to floods than low-income earners. This supports the current use of mean economic damage in engineering-based flood intervention analysis. Second, indirect damages increase with the increase in family size, indicating the importance of strengthening preparedness and social support to those with great social responsibility. Overall, the study highlights the importance of holistic flood management accounting for both direct and indirect losses.