Assessing the socioeconomic and environmental determinants of flood vulnerability in India: a panel data approach

This study investigates the socioeconomic and environmental determinants of flood vulnerability in Indian states using a panel data approach. Drawing on state-level flood damage data from 1953 to 2020, sourced from the Ministry of Jal Shakti and affiliated agencies, this study employs a robust econometric framework to identify the key drivers of flood-related damage. The dataset included 16 variables, and rigorous preprocessing steps, such as data cleaning, interpolation, stationarity testing, and multicollinearity checks, to ensure model reliability. Endogeneity was tested using IV regression, and the absence of such issues allowed for the application of Fixed Effects (FE) and Random Effects (RE) models. The Hausman test favored the RE model, which was further validated through diagnostic and robustness tests. The findings reveal that capital expenditure, government spending on natural calamities, and mangrove coverage significantly reduce flood damage, highlighting the importance of both fiscal and ecological interventions. Conversely, population affected, damage to houses, and damage to public utilities were positively associated with flood damage, indicating the need for targeted infrastructure and community resilience strategies. This study offers actionable insights for policymakers, emphasizing the integration of environmental conservation with strategic public investment to enhance flood resilience in India.