Economic Impacts of the 2010 Floods in North Sindh

A Hicksian Compensating Variation Approach


Imtiaz Ahmed Pirzada
Parveen Shah
Naveed Ahmed Shaikh


Present study has applied Hicksian Compensating Variation approach for empirical estimation of the welfare loss in the households of the four selected districts of North Sindh (Qamber Shahdadkot, Kashmore-Kandhkot, Jacobabad and Shikarpur) that were severely affected during flood 2010. The income and substitution effects were estimated from Marshallian demand curves. Slutsky equation is applied to isolate the income effect from the total effect to estimate the Hicksian demand equations. The total intervention estimated to be required was approximately PKR 61.16 billion in the four selected districts however the total intervention provided in the form of rescue, relief, rehabilitation, and reconstruction was equal to PKR 47.2 billion. A short fall of approximately PKR 15 billion was observed. The Hicksian Compensation required estimated per household per month is to the tune of PKR 11703 per month.


List of Tables
List of Figures
List of Abbreviations

1. Introduction
Global Warming and Natural Disasters
Flooding, Natural Disasters and Risk Management
Frequency of Natural Disasters in Pakistan: Historical Evidence
Organization of the Study

2. The Background of Study and the Problem
Floods and climate change in Pakistan
Impact of Climate Change
Natural Disasters in Pakistan: Historical Perspective
Flood 2010 Facts
Flood 2010 and Food Security
Displaced Populations
Flood Damages in Pakistan: Province wise and Sector wise
Damages in all over Pakistan
Sectoral Description of the Flood Damage
Flood Damage: Selected District-wise
Profile of Selected Districts
Research Questions

3. Literature
Risk Management
Welfare Loss
Distortion in Commodity Market
Rural Economy Effects

4. Method and Model
Estimation of Demand Equations
Household Expenditure Function
Indifference Curve Analysis and Optimal Choice
Expenditure Function and Optimization Problem
Income and Substitution Effects
Substitution Effect
Income Effect
Slutsky Equation
Hicksian Compensating Variation
Data Source and the type of Data

5. Econometric Results and Interpretation
Estimated Marshallian Demands
Estimated Marshallian Demanded Quantities in KGs
Estimated Budget Shares and Welfare Loss
Estimated Budget Shares and Welfare Loss
Estimated Income and Substitutions Effects
Hicksian Estimated Demand
Hicksian Estimated Demanded Quantities in KGs
Compensation Required in KGs and PKR per household

6. Qualitative analysis Through Focus Group Discussions
Flood Occurrence
Community Perceptions
Losses / Damages
Support during displacement
Returning to home
Support after return

7. Conclusion and Recommendations


About Editor

Imtiaz Ahmed Pirzada

Sindh University Jamshoro, Pakistan

Parveen Shah

Shah Abdul-Latif University, Pakistan


Naveed Ahmed Shaikh

Shaheed Zulfikar Ali Bhutto Institute of Science and Technology, UAE



Date of Publication

December 15, 2018

File Size: 2194 KB
Length: xviii + 98 pages

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