How Climate Change Can Affect Where People Live? Evidence from Flood Surprises

Petkov, Ivan (2018): How Climate Change Can Affect Where People Live? Evidence from Flood Surprises.

Abstract

This paper examines the extent to which flood-risk revisions, on their own, can affect the size of the community and real estate values over time. I compile a new measure of insured and uninsured losses for 4,147 communities and identify relatively small flood events that occur in places with different flood history. I show that flood history determines the extent to which events are anticipated and covered by insurance. Only locations with flood surprises experience declines in population. These occur in attractive communities with high pre-flood growth where real estate prices do not compensate for higher flood risk. Flood surprises in communities where housing prices decrease and compensate for higher risk have stable population.

• Item Type: MPRA Paper
• Language: English
• Keywords: Migration, Population, Flood Surprises, Climate Change Real Estate, Natural Disasters
• Subjects: J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J61 - Geographic Labor Mobility ; Immigrant Workers; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R30 - General

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