Forgetting the Flood? An Analysis of the Flood Risk Discount over Time

We examine whether property price differentials reflecting flood risk increase following a large flood event, and whether this change is temporary or permanent. We use single-family residential property sales in Dougherty County, Georgia, between 1985 and 2004 in a difference-in-differences spatial hedonic model framework. After the 1994 flood of the century, prices of properties in the 100-year floodplain fell significantly. This effect was, however, short-lived. In spatial hedonic models that explicitly incorporate both linear and nonlinear temporal flood-zone effects, we show that the flood risk discount disappeared between four and nine years after the flood, depending upon the specification.

 

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Source
Wharton University of Pennsylvania
Length of Resource
19
Author
Ajita Atreya,Susana Ferreira, andWarren Kriesel
Date Published
Publication Type
paper
Resource Type
academic

ResourceID: 72521

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