Assessing the Benefits of Levees:An Economic Assessment of U.S. Counties with Levees

Ezra BoydGeography Graduate Student

Louisiana State University

Research sponsored by

Outline

• Data, hypothesis, and theory• Analysis and results• A look at Louisiana County with Levees• Conclusions

FEMA’s List of US Counties With Levees

• Based on the National Flood Insurance Database• Sept 2009: Levees.org obtains data from FEMA

through FOIA– Data requested in March 2009

• Oct 2009: Entered data in GIS and mapped– First map supported by La. State Medical Society

• Dec 2009: Used Census 2000 SF 3 data to examine the economic and social conditions associated with populations near levees

Basic Statistics from FEMA

55% of population lives in 28% of counties

Suggests “Pull Factor”A social or economic benefit that encourages

population settlement and growth

‘County with Levee’Proxy For

‘Population settled in and near a floodplain’

• Geography: The study of the Earth as the home of humans

• Geographers are interested in population trends and patterns

• Hazard geographers are interested in how environmental hazards influence population trends

• Example: Human settlement and modification of floodplains

Real and Perceived

Economic and Social BenefitsOf Floodplains

Human Settlement and

Expansionin Floodplains

Structural Modifications of Floodplain’s

Landscape

Hypothesized Correlation betweenLevees and Social & Economic

Wellbeing

The ContextConstanza, et al: Summary of Average Global Value of Annual Ecosystem

Services– Coastal: $4,000 (per hectacre per year)– Wetlands: $14,800– Forest: $970

Braumann, et al: “What is the spatial relationship between ecosystem services supply and consumption?”

United Nations:

“Recent studies have shown that the overwhelming bulk of humanity isconcentrated along or near coasts on just 10% of the earth’s land surface. As of 1998, over half the population of the planet — about 3.2 billion people — lives and works in a coastal strip just 200 kilometers wide (120 miles), while a full two-thirds, 4 billion, are found within 400 kilometers of a coast.”

The Theoretical Arguments

Miletti: flood losses are “primarily the consequence of narrow and shortsighted development patterns, cultural premises, and attitudes.”

Burby: government investment in flood preventions levees forms a “safe development paradox”

Bahr: “What I think was irrational was the manner in which the formerly booming port city built above sea level sprawled into and destroyed a protective coastal swampforest basin.”

Data Analysis

Used FIPs Code to join the Counties with Levees list to 2000 Census SF 3 dataset– Dataset included county population, per capita income, and %

income below poverty rate– Total income = population x per capita income

= proxy for county GDP

Exploratory mapping to assess the prevailing trends

Statistical analysis to compare the US counties with and without levees – T-test compares average value of population, per capita income,

total income, poverty rate

Three Hypothesis

Hypothesis 1 – Total productivity is greater in counties with levees.

Hypothesis 2 – Personal income is greater in counties with levees.

Hypothesis 3 – Poverty rates are less in counties with levees.

The Maps

US Counties with Levees

Population andCounties with Levees

Total Income andCounties with Levees

Per Capita Income andCounties with Levees

Poverty Rate andCounties with Levees

Statistical Results

Indicator t-statistic p-value Mean, Levees Mean, No Levees Interpretation

Total Productivity -7.3559 3.98E-13 $3,840,812,166 $1,168,502,109

Total productivity is nearly 3.3 times greater in counties with levees

Per Capita Income

-8.7017 < 2.2e-16 $18,341 $16,846Persons in counties with levees earned an average of nearing $1,500 more in

2000

Poverty Rate 7.0739 2.00E-12 13.59% 15.69% Poverty rate was 2% less in

counties with levees

Statistical Results

The results support all three of the hypotheses; the difference in the means is statistically significant with substantive implications:

• Hypothesis 1 – Is productivity greater in counties with levees?=> Yes. The average county with levees produces nearly 3.3 times (or $2.6 billion) more in annual goods and services.

• Hypothesis 2 – Is personal income greater in counties with levees?=> Yes, the average resident in a county with levees earns $1,500 more per year.

• Hypothesis 3 – Is poverty less prevalent in counties with levees?=> Yes, the poverty rate averages 2% less in counties with levees.

Louisiana Case Study

Levees % Levees No Levees % No Levees

Number of Parishes

37 57.81% 27 42.19%

Total Population

3,228,050 73.58% 1,180,926 26.42%

Total Workers

1,361,548 74.36% 469,509 25.64%

Sum of Total Income

$57,219,654,011 75.71% $18,361,632,279 24.29%

Average of Total Income

$1,546,477,135 $680,060,455

Average of Per Capita Income

$15,055 $14,228

Average of Poverty Rate

22.38% 21.41%

Louisiana Parisheswith Levees

Louisiana Urban Areas and Parishes with Levees

Population Z-score andParishes with Levees

Total Income Z-score andParishes with Levees

Per Capita Income Z-Score andParishes with Levees

Poverty Rate Z-score andParishes with Levees

Conclusions

Human settlement and modification in floodplains:– 55% of American’s live in county with levees– They earn more, produce more, and require less expenditures on poverty

programs– In Louisiana, nearly 75% of personal income is earned in counties with levees.

Is it really a “paradox” that government’s pursue policies that encourage economic growth and increased tax base?– In 1999, government collected an additional $70 billion in taxes from

floodprone counties.– $5.3 billion in total flood loses for that year

Is it really “narrow and shortsighted” or “irrational” to want to earn more?