On Friday, July 4th, disaster struck when torrential rain poured into southern Texas near the Guadalupe River, one of the top three most dangerous regions in the country for flash floods. In just 45 minutes, the river rose 26 feet, the second-highest rise on record. Rainfall rates ranged from two to four inches per hour, creating up to 18 inches of water in some areas.
Flash flood warnings began to be released at 1:14am local time, three hours before catastrophic flooding began. However, flash flood warnings provided by local weather channels have become so common for the region that many could not anticipate the true severity of the flood. The flooding that ensued was devastating, and as of Thursday evening, at least 120 people had been found dead in the state, with hundreds more still missing. Numerous FEMA and DHS officials and resources have been sent to the state to assist with rescue and recovery efforts. On Thursday morning, more than 2,100 personnel were on the ground helping to recuperate families after devastation.
While it can be difficult to attribute a single weather event to climate change, intense rainfall and flooding are happening with increasing frequency in Texas and across the rest of the United States. Many are referring to the disaster in Texas as a “perfect storm”: the distribution of rainfall was one of the worst possible patterns for the region, concentrating rainfall in an area with steep terrain; southern Texas itself had been experiencing a severe drought, leaving behind compacted soil that decreased water infiltration and increased runoff; and the Gulf of Mexico (or “Gulf of America” depending on which shore you stand on) has had warmer-than-average temperatures, leading to higher water content in the air near Texas.
As the disaster settles, concerns continue to grow that local jurisdictions may not be adequately prepared for such flooding events. Even more so, uncertainty around the future of federal funding toward disaster prevention, particularly with agencies such as FEMA, make local disaster management shortcomings even scarier.
Whether the flooding in Texas was due to growing concerns of climate change, unlucky weather patterns, lack of local preparedness, or something else entirely, the increasing prevalence of heavy rainfall and flooding calls for the discussion of more disaster prevention infrastructure and policymaking.
One tool that we employ a lot at Scioto Analysis is cost-benefit analysis, and it can be a great way to evaluate and show the effectiveness of flooding mitigation infrastructure and other disaster prevention projects.
While early cost-benefit analysis has been traced back to French public works projects in the seventeenth century, cost-benefit analysis in the United States is typically believed to have started with water resource and flood control projects in the nineteenth and twentieth centuries. In the nineteenth century, water resource development was gaining momentum in the United States, and while proponents justified these projects with talks of economic development, political unity, and national defense needs, it was difficult to show clear, immediate benefits for the public that were worth such a high price tag.
In 1936, the Flood Control Act was passed as part of the New Deal, which marks what most believe to be the official start of cost-benefit analysis in the United States. Some of the most relevant language in the legislation includes, “if the benefits to whomsoever they may accrue are in excess of the estimated costs”.
An earlier report from the National Resources Board has an even clearer objective: “to achieve rational planning and in particular to achieve equitable allocations of benefits and contributions to cost in public works programs.” Both the Flood Control Act and guidance from the National Resources Board meant that there was now a cost-benefit analysis rule written into U.S. law. If Congress wanted to authorize a new public works project, it needed to be extensively studied, analyzed, and approved.
More recently, there have been executive orders and additional federal guidance that require cost-benefit analyses to be completed for all major regulations. The importance of this level of analysis cannot be overstated, especially when it comes to estimating the costs of human life.
We have written about the value of a statistical life at Scioto Analysis extensively in the past. In policy analysis, the value of a statistical life is the amount that individuals are willing to pay to reduce the risk of death, determined using labor market data around pay premiums for more hazardous occupations. It is important to make sure human life is taken into account in economic policymaking, especially when evaluating public works projects such as flooding mitigation or other disaster prevention that can have a major impact on human life. In 2025, current estimates of the value of a statistical life are in the $13 million range. This means that beyond the inherent value in saving lives, an infrastructure project saving just one–or a fraction of– human life can yield immense economic value to society.
Public policy decisions ultimately lead to loss of life in Texas. On July 4th, peak flooding levels in Texas of 34.3 feet were recorded at 6:45am. As early as 4:22am, when flooding levels were already reaching nearly 20 feet, a volunteer firefighter asked Kerr County, a county within the area of the flooding, to release alerts to the county with their emergency mass notification system. However, reports from numerous residents indicate that these text-message style alerts did not arrive on people’s phones until 10-11am, after some of the worst flooding had already passed. Additionally, the county did not issue its own Amber Alert style warning until two days after the deadliest day of flooding.
Could this have been prevented? In 2016, Kerr County put together a proposal to fund a flood warning system that would have added flood alert sirens to the area. Ultimately, the sirens were cut from the proposal due to cost and the risk of them accidentally going off at night. In total, the proposal was estimated to cost $1 million. If the warning system was installed and saved even one of the lives lost in Texas this past weekend, there would have been a net economic value of more than $10 million. This means even from a cold economic perspective, a poor decision was made.
As more time passes, the risk of flooding is only worsening. Some of the most severe floods are five times more likely to happen each year now than they were just a few years ago. As we conduct cost-benefit analysis about these kinds of infrastructure projects, it is easy to get lost in the weeds of analysis. But, it is important to remember cases such as southern Texas, where rigorous cost-benefit analysis can help convince policymakers of the ever-growing importance of planning for disaster and saving lives.