There exists a great deal of literature on economic losses from flood disasters, However, examination of the literature raises concerns with regard to inappropriate selection of flood risk variables and omitted variable bias in estimating flood damage. In this paper, we estimate a Hedonic land price model by employing two-step procedures to correct the omitted variable bias on flood risk. The flood risk is estimated to lower the land price by 10.24% and the flood damage is estimated to be 1,200,000 yen/m². This estimate is fairly large compared with the estimate by Tokyo Metropolitan Government, which indicates that the indirect damage cost is likely to be much higher than the direct damage cost. In addition, we find that previous studies are likely to underestimate perceived flood damage.