Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/223995
Authors: 
Gibson, Matthew
Mullins, Jamie
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13553
Abstract: 
Applying a difference-in-differences framework to a census of residential property transactions in New York City 2003-2017, we estimate the price effects of three flood risk signals: 1) the Biggert-Waters Flood Insurance Reform Act, which increased premiums; 2) Hurricane Sandy; and 3) new floodplain maps reflecting three decades of climate change. Estimates are negative for all three signals and some are large: properties included in the new floodplain after escaping flooding by Sandy experienced 11 percent price reductions. We investigate possible mechanisms, including selection of properties into the market and residential sorting. Finding no evidence for these, we develop a parsimonious theoretical model that allows decomposition of our reduced-form estimates into the effects of insurance premium changes and belief updating. Results suggest the new maps induced belief changes comparable to those from insurance reform.
Subjects: 
beliefs
updating
climate change
flood risk
JEL: 
Q54
Q58
R30
G22
Document Type: 
Working Paper

Files in This Item:
File
Size
8.24 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.