ABSTRACT
The importance of scientific assessment of flood damage aims at a realistic assessment of the benefit-cost ratio of a flood control scheme. The word ‘control’ in real terms means protection. Assessment of the worth of any flood protection scheme involves a study of applied economics in the sense that annual savings due to a flood control measure in terms of severity, protection of life and property must be evaluated against the cost of construction and maintenance of the engineering structures needed for it. Generally speaking, the condition of economic analysis requires that the system needs to be, developed to the level at which the marginal benefit of producing output equals to the marginal cost of producing it. Marginal cost and marginal benefit are respectively the first derivative of the cost and the first derivative of the benefit with respect to the output. For a multi-purpose project for optimization the above condition for a particular purpose may be written as:
MB MC
MB MC
MB MC
2 1= = -- = = , (8.1)
where MBn is the marginal gross benefit and MCn is marginal cost. Or
∂ ∂
= ∂ ∂
= -- = ∂ ∂
= B C
B C
B C
2 1, (8.2)
In analysing a project for the above-mentioned economic conditions, several types of economic and technical relationship should be considered such as input-cost function, the production function, the annual-cost and benefit function. The input-cost function is the multi-dimensional relationship between the total cost of the project and the magnitudes of the project variables.
