COST-BENEFIT ANALYSIS OF LANDUSE REGULATION STRATEGY BASED ON FLOOD RISK ASSESSMENT USING A LOCATION EQUILIBRIUM MODEL INCORPORATING HOUSEHOLD INCOME DISTRIBUTION

Abstract

  This paper proposes a location equilibrium model incorporating household income distribution. We applied this model to Neyagawa riverbasin, in Osaka, to evaluate social costs and benefits of landuse regulation strategies based on flood risk assessment. The result of the cost-benefit analysis shows that the impact of the landuse regulation strategies on a low income group would be greater than higher income groups. Net benefit of landuse regulations becomes maximum at the regulation level of 5 year flood return period. When regulations based on more than 25 years flood return period are conducted, the net benefit becomes negative. These results reveal that it is beneficial to prohibit the area with high flood frequency from being used for housing.