This study provides a systematic cost-benefit analysis of a community-based disaster risk management project led by Practical Action in two districts of Nepal over the period 2007 to 2010. The objectives of the project were (i) to improve the socio-economic status of communities vulnerable to natural disasters, and (ii) to enhance the capacity of stakeholders at different levels to adopt a livelihood centered approach to disaster risk reduction.
The assessment took the form of a systematic quantitative analysis of the economic costs and benefits associated with the community-based project activities and applied the established analytic framework of economic social cost-benefit analysis. Benefits due to the project were measured in terms of the present value of real income gains compared to a “without-project” baseline. The assessment did not only take account of benefits already observable during the 2007-10 project implementation period but also included expected future gains beyond 2010. The costs incurred to achieve these benefits include the direct project costs as well as the opportunity costs of additional human and material resources contributed by the target households and other local stakeholders.