Quantitative Analysis of the Effects of Floods in Nepal

A primary objective of this research is to contribute to addressing the existing gap in the literature related to the assessment of the effects of floods in Nepal. There are very few works of literature on the household-level economic impact assessment of flood events in Nepal, and those that exist are geographically limited to the river basin, municipality, or village level. Using the nationally representative data from the Household Risk and Vulnerability Survey-Panel conducted by the World Bank, I studied the effects of direct exposure to 2017 flood events in Nepal among households in the rural and urbanizing areas of the Terai belt of Nepal. This research employed descriptive statistics, logistic regression analysis, and difference-in-difference methodology as empirical approaches to assess the impacts on economic outcomes related to crop production, income, and assets. I found that effects from direct flood exposure were larger on total paddy production and value, followed by total income compared to the effect on the household assets. The findings from this research imply that households relying on subsistence agriculture were the most affected group by direct exposure to the 2017 flood in rural and urbanizing areas of the Terai belt of Nepal.