Do floods widen the economic disparity gap?

Abstract

Floods exacerbate economic inequality, disproportionately affecting the poor in flood-prone areas while the rich in non-flood-prone regions continue to prosper. While this trend was illustrated conceptually and qualitatively, this study offers the first quantitative evidence that floods widen the economic disparity gap between the rich and poor in flooded and non-flooded areas. Using Household Interview Survey (HIS) data, we analyze the floods of Thailand's Chao Phraya River in 2011 and 2021 to measure the economic impact on households. The economic gap between the non-flooded rich and flooded poor widened from 38,539 Baht in 2011 to 104,897 Baht in 2021, a 2.7-fold increase. Surprisingly, the poor in our study differed from the hypothesis in that there was still improving economic growth, albeit small. Floods decrease the poor's ability to accumulate wealth – 9.2%, as opposed to 60.7% for the rich – although their impact on widening disparity for households of the same economic stratum was far greater for the poor (widened 18×) than for the rich (widened 4.7×). Finally, we propose ‘net total cash’ as a better measure of economic change compared to ‘income’ or ‘expenditure’, minimizing external influences like the COVID-19 pandemic, which in 2021 caused income to plummet and expenditure to rise.