Discounting Disaster

Land Markets and Climate Change in the Indian Sundarbans


  • Sunando Bandyopadhyay University of Calcutta
  • Sumana Bandyopadhyay University of Calcutta
  • Susmita Dasgupta World Bank
  • Chinmoyee Mallik West Bengal State University
  • David Wheeler World Bank



Indian Sundarbans; land transactions; environmental variables; tropical cyclones; salinity; coastal inundation, Indian Sundarbans; land transactions; environmental variables; tropical cyclones; salinity; coastal erosion


Data scarcity has hindered studies on the impacts of climate change on land prices in the coastal regions of developing countries. Focused on the Indian Sundarbans, this paper is at the forefront of such research. Market conditions in the region feature unregulated transactions, unenforced zoning, and a lack of disaster insurance. For many residents with hereditary land ownership, stark poverty eliminates any risk buffer provided by savings or other non-essential liquid assets. Using new household surveys and environmental data, our study hypothesizes that salinization and cyclone strikes have already adversely affected land prices. We quantify such impacts using a georeferenced panel of 342 salinity monitoring stations and a spatial raster database on all cyclonic storm strikes since 1970. Our econometric results reveal highly significant negative impacts for both factors. We use the regression results to predict land prices for the most and least favourable environmental conditions recorded in our database. The results show that these climate change–related conditions account for spatial differentials greater than an order of magnitude in land prices. Such extreme risk differentials suggest high financial and fiscal stakes, underscoring the critical importance of appropriately targeted adjustment policies.


Download data is not yet available.


Metrics Loading ...

Author Biographies

Sumana Bandyopadhyay, University of Calcutta

Professor of Geography 

University of Calcutta

Susmita Dasgupta, World Bank

Lead Environmental Economist,

Development Economics Research Group

Chinmoyee Mallik, West Bengal State University

Assiatant Professor

Department of Rural Studies

David Wheeler, World Bank



ADB-GoO-WB. 2013. “Cyclone Phailin in Odisha, October 2013: Rapid Damage and Needs Assessment Report: 60.” Asian Development Bank, Government of Odisha, World Bank.

Atreya, Ajita, and Jeffery Czajkowski. 2019. “Graduated Flood Risks and Property Prices in Galveston County.” Real Estate Economics 47 (3): 807–44.

Atreya, Ajita, and Susana Ferreira. 2014. “Seeing is Believing? Evidence from Property Prices in Inundated Areas.” Risk Analysis 35 (5): 828–48.

Atreya, Ajita, Susana Ferreira, and Warren Kriesel. 2013. “Forgetting the Flood? An Analysis of the Flood Risk Discount Over Time.” Land Economics 89 (4): 577–96.

Bakkensen, Laura, and Lint Barrage. 2021. “Going Underwater? Flood Risk Belief Heterogeneity and Coastal Home Price Dynamics.” The Review of Financial Studies.

Bandyopadhyay, Sunando, Susmita Dasgupta, Zahirul Huque Khan, and David Wheeler. 2021. “Spatiotemporal Analysis of Tropical Cyclone Landfalls in Northern Bay of Bengal, India and Bangladesh.” Asia Pacific Journal of Atmospheric Sciences 57 (4): 799–815.

Bartosova Alena, David E Clark, Vladimir Novotny, and Kyra S Taylor. 2000. “Using GIS to Evaluate the Effects of Flood Risk on Residential Property Values.” Economics Faculty Research and Publications 131.

Beltrán, Allen, David Maddison, and Robert JR Elliott. 2018. “Is Flood Risk Capitalised into Property Values?” Ecological Economics 146 (C): 668–85.

Beltrán, Allen, David Maddison, and Robert Elliott. 2019. “The Impact of Flooding on Property Prices: A Repeat-sales Approach.” Journal of Environmental Economics and Management 95 (C): 62–86.

Bin, Okmyung, and Jamie Brown Kruse. 2006. “Real Estate Market Response to Coastal Flood Hazards.” Natural Hazards Review 7 (4): 137–44.

Bin, Okmyung, and Stephen Polasky. 2004. “Effects of Flood Hazards on Property Values: Evidence Before and After Hurricane Floyd.” Land Economics 80 (4): 490–500.

Bin, Okmyung, Ben Poulter, Christopher F Dumas, and John C Whitehead. 2011. “Measuring the Impact of Sea‐level Rise on Coastal Real Estate: A Hedonic Property Model Approach.” Journal of Regional Science 51 (4): 751–67.

Bin, Okmyung, Jamie Brown Kruse, and Craig E Landry. 2008. “Flood Hazards, Insurance Rates, and Amenities: Evidence from the Coastal Housing Market.” Journal of Risk and Insurance 75 (1): 63–82.

Bishop, Kelly C, Nicolai V Kuminoff, H Spencer Banzhaf, Kevin J Boyle, Kathrine von Gravenitz, Jaren C Pope, V Kerry Smith, and Christopher D Timmins. 2020. “Best Practices for Using Hedonic Property Value Models to Measure Willingness to Pay for Environmental Quality.” Review of Environmental Economics and Policy 14 (2): 260–81.

Buurman, J. 2001. “Land Markets and Land Prices: A Review of the Theory.” Unpublished paper, Department of Spatial Economics, Free University, Amsterdam.

Census of India. 2011. Population Data of Blocks in South Twenty-Four Parganas District, West Bengal.

Dachary-Bernard, Jeanne, H Rey-Valette, and Et Bénédicte Rulleau. 2019. “Preferences among Coastal and Inland Residents Relating to Managed Retreat: Influence of Risk Perception in Acceptability of Relocation Strategies.” Journal of Environmental Management 232: 772–80.

Daniel, Vanessa E, Raymond Florax, and Piet Rietveld. 2009. “Flooding Risk and Housing Values: An Economic Assessment of Environmental Hazard.” Ecological Economics 69 (2): 355–65.

Dasgupta, Susmita, and David Wheeler. 2018. “The Cyclone’s Shadow: Historical Storm Impacts and Population Displacement in Bangladesh, West Bengal and Odisha.” World Bank Policy Research Working Paper.

Dasgupta, Susmita, David Wheeler, and Santadas Ghosh. 2022. “Fishing in Salty Waters: Poverty, Occupational Saline Exposure, and Women’s Health in the Indian Sundarbans.” Journal of Management and Sustainability 12 (1).

Dasgupta, Susmita, David Wheeler, Sunando Bandyopadhyay, Santadas Ghosh, and Utpal Roy. 2022. “Coastal Dilemma: Climate Change, Public Assistance, and Population Displacement.” World Development 150: 105707.

Dasgupta, Susmita, Mainul Huq, Md Golam Mustafa, Istiak Sobhan, and David Wheeler. 2017. “The Impact of Aquatic Salinization on Fish Habitats and Poor Communities in a Changing Climate: Evidence from Southwest Coastal Bangladesh.” Ecological Economics 139: 128–39.

Dasgupta, Susmita, Md Moqbul Hossain, Mainul Huq, and David Wheeler. 2016. “Facing the Hungry Tide: Climate Change, Livelihood Threats, and Household Responses in Coastal Bangladesh.” Climate Change Economics 7 (3): 1650007.

Dasgupta, Susmita, Md. Moqbul Hossain, Mainul Huq, and David Wheeler. 2018. “Climate Change, Salinization and High-yield Rice Production in Coastal Bangladesh.” Agricultural and Resource Economics Review 47 (1): 66–89.

Donnelly, William A. 1989. “Hedonic Price Analysis of the Effect of a Floodplain on Property Values.” Journal of the American Water Resources Association 25 (3): 581–86.

Dubé, Jean, Maha AbdelHalim, and Nicolas Devaux. 2021. “Evaluating the Impact of Floods on Housing Price Using a Spatial Matching Difference-in-differences (SM-DID) Approach.” Sustainability 13 (2): 804.

EM-DAT. 2019. “The International Disaster Database.” Centre for Research on

the Epidemiology of Disasters. Accessed 25 June 2019

Eves, Chris. 2004. “The Impact of Flooding on Residential Property Buyer Behaviour: an England and Australian Comparison of Flood Affected Property.” Structural Survey 22 (2): 84–94.

Frazier, Tim, Elizabeth E Boyden, and Erik Wood. 2020. “Socioeconomic Implications of National Flood Insurance Policy Reform and Flood Insurance Rate Map Revisions.” Natural Hazards 103: 329–46.

Fu, Xinyu, and Jan Nijman. 2021. “Sea Level Rise, Homeownership, and Residential Real Estate Markets in South Florida.” The Professional Geographer 73 (1): 62–71.

Gatzlaff, Dean H, and David C Ling. 1994. “Measuring Changes in Local House Prices: An Empirical Investigation of Alternative Methodologies.” Journal of Urban Economics 35 (2): 221–44.

Gatzlaff, Dean H, and Donald R Haurin. 1997. “Sample Selection Bias and Repeat-sales Index Estimates.” The Journal of Real Estate Finance and Economics 14 (1): 33–50.

Gatzlaff, Dean H, and Donald R Haurin. 1998. “Sample Selection and Biases in Local House Value Indices.” Journal of Urban Economics 43 (2): 199–222.

Ghoshal, TK., Debasis De, G Biswas, Prem Kumar, and KK Vijayan. 2019. “Brackish Water Aquaculture: Opportunities and Challenges for Meeting Livelihood Demand in Indian Sundarbans.” In The Sundarbans: A Disaster-Prone Eco-Region, edited by H Sen, 321–49. Cham, Switzerland: Springer.

GoB. 2008. “Cyclone Sidr in Bangladesh: Damage, Loss and Needs Assessment for Disaster Recovery and Reconstruction.” Government of Bangladesh.

GoWB. 2009. “Flood Management: Aila.” Irrigation and Waterways Department, Government of West Bengal.

CIESIN. 2019. “Gridded Population of the World (GPW).” Center for International Earth Science Information Network. Accessed 30 December 2019.

Harrison, David, Greg T Smersh, and Arthur Schwartz. 2001. “Environmental Determinants of Housing Prices: The Impact of Flood Zone Status.” Journal of Real Estate Research 21 (1–2): 3–20.

Hoover, Edgar M, and F Giarratani. 1999. An Introduction to Regional Economics. Web Book of Regional Science, 4. New York, US: Alfred A Knopf.

HRC-AOML. 2018. “Hurricane Damage as a Function of Wind Speed.” Miami, FL: Hurricane Research Division, Atlantic Oceanographic and Meteorological Laboratory, US National Oceanic and Atmospheric Administration.

Hsiang, Solomon M. 2010. “Temperatures and Cyclones Strongly Associated with Economic Production in the Caribbean and Central America.” PNAS 107 (35).

Hsiang, Solomon M. 2020. “Standard Error Adjustment (OLS) for Spatial Correlation and Serial Correlation in Panel Data in (Stata and Matlab).” Fight Entropy.

IAA. 2009. “In-depth Recovery Needs Assessment of Cyclone Aila Affected Areas, Bangladesh: 36.” International Aid Agencies.

IMD. 2013. “Severe Cyclonic Storm Aila: A Preliminary Report.” New Delhi: Regional Specialised Meteorological Centre, India Meteorological Department.

Khalil, Gazi M. 1993. “The Catastrophic Cyclone of April 1991: Its Impact on the Economy of Bangladesh.” Natural Hazards 8 (3): 263–81.

Kousky, C, H Kunreuther, M LaCour-Little, and S Wachter. 2020. “Flood Risk and the Housing Market.” Journal of Housing Research 29: S3–S24.

Krishna, K Muni. 2009. “Intensifying Tropical Cyclones over the North Indian Ocean during Summer Monsoon—Global Warming.” Global and Planetary Change 65 (1–2): 12–16.

Lichter, Michal, and Daniel Felsenstein. 2012. “Assessing the Costs of Sea-level Rise and Extreme Flooding at the Local Level: A GIS-based Approach.” Ocean and Coastal Management 59: 47–62.

Lin, Tzu-Chin, and Alan W Evans. 2000. “The Relationship between the Price of Land and Size of Plot when Plots are Small.” Land Economics 76 (3): 386–94.

Mallick, Bishwajit, Khan Rubayet Rahaman, and Joachim Vogt. 2011. “Coastal Livelihood and Physical Infrastructure in Bangladesh after Cyclone Aila.” Mitigation and Adaptation Strategies for Global Change 16 (6): 629–48.

McAlpine, Steven A, and Jeremy R Porter. 2018. “Estimating Recent Local Impacts of Sea-level Rise on Current Real-estate Losses: A Housing Market Case Study in Miami-Dade Florida.” Population Research and Policy Review 37 (6): 871–95.

McNamara, Dylan E and Andrew Keeler. 2013. “A Coupled Physical and Economic Model of the Response of Coastal Real Estate to Climate Risk.” Nature Climate Change 3 (6): 559–62.

Mishra, Ashutosh. 2014. “Temperature Rise and Trend of Cyclones over the Eastern Coastal Region of India.” Journal of Earth Science & Climate Change 5 (9): 227.

Mukhopadhyay, Anirban, David Wheeler, Susmita Dasgupta, Ajanta Dey, and Istiak Sobhan. 2019. “Mangrove Spatial Distribution in the Indian Sundarbans: Predicting Salinity-induced Migration.” Journal of Management and Sustainability 9 (1): 1–15.

Munneke, Henry J, and Barrett A Slade. 2000. “An Empirical Study of Sample-selection Bias in Indices of Commercial Real Estate.” The Journal of Real Estate Finance and Economics 21 (1): 45–64.

Nakanishi, Hayato. 2016. “How the Change of Risk Announcement on Catastrophic Disaster Affects Property Prices?” In The Economics of the Global Environment, edited by Graciela Chichilnisky and Armon Rezai, 577–95. Cham, Switzerland: Springer.

NIDM. 2014. “Proceedings, National Workshop on Phailin Cyclone 2013: Lessons Learnt.” New Delhi, India: Ministry of Home Affairs, Government of India.

NOAA. 2018. International Best Track Archive for Climate Stewardship (IBTrACS), National Oceanic and Atmospheric Administration., Dimuthu, and Buvaneshwaran Venugopal. 2020. “Do Areas Affected by Flood Disasters Attract Lower-income and Less Creditworthy Homeowners?” Journal of Housing Research 29 (1): S121–S143.

Shilling, James D, John D Benjamin, and CF Sirmans. 1985. “Adjusting Comparable Sales for Floodplain Location.” The Appraisal Journal 53 (3): 429–37.

Speyrer, Janet Furman, and Wade R Ragas. 1991. “Housing Prices and Flood Risk: An Examination using Spline Regression.” The Journal of Real Estate Finance and Economics 4 (4): 395–407.

Tukey, John W. 1977. Exploratory Data Analysis. Reading, Massachusetts: Addison-Wesley Pub. Co.

USNHC. 2018. “Hurricane Decay: Demise of a Hurricane.” United States National Hurricane Center.

West, J Jason, Mitchell J Small, and Hadi Dowlatabadi. 2001. “Storms, Investor Decisions, and the Economic Impacts of Sea Level Rise.” Climatic Change 48 (2): 317–42.

Wu, Pei-Ing, Yi Chen, and Je-Liang Liou. 2021. “Housing Property along Riverbanks in Taipei, Taiwan: A Spatial Quantile Modelling of Landscape Benefits and Flooding Losses.” Environment, Development and Sustainability 23: 2404–38.

WWF. 2019. “Sundarbans Salinity Monitoring Database.” World Wide Fund for Nature International.

Yohe, Gary, James Neumann, Patrick Marshall, and Holly Ameden. 1996. “The Economic Cost of Greenhouse-induced Sea-level Rise for Developed Property in the United States.” Climatic Change 32 (4): 387–410.

Additional Files



How to Cite

Bandyopadhyay, S., Bandyopadhyay, S. ., Dasgupta, S., Mallik, C., & Wheeler, D. (2022). Discounting Disaster: Land Markets and Climate Change in the Indian Sundarbans. Ecology, Economy and Society–the INSEE Journal, 5(2).



Research Paper