The economics of flood insurance

Introduction

This short course is a taster of the Open University Level 2 module, Economics in Practice. It will introduce you to some of the practical ways that the theories, tools and techniques of economics are used and impact on our everyday lives.

You will look at the issue of flooding, a problem with a long history but becoming increasingly important globally because of the impact of climate change. Using economic theory, you will explore why market forces alone typically cannot resolve the problems associated with flooding, creating a rationale for government intervention. You will then see how a key tool of economics, cost-benefit analysis, can be applied to assess and weigh the net benefits of such intervention.