Weather Shocks, House Prices, and Population: Role of Expectation Revisions

Petkov, Ivan (2018): Weather Shocks, House Prices, and Population: Role of Expectation Revisions.

Abstract

This paper studies how expectations of future flood risk in communities within the U.S. change once they experience a flood. Focusing on small events, I examine if population and housing values change in a way consistent with higher flood risk. To do this, I compile a new measure of insured and uninsured losses for 4,147 locations and identify small flood events at places with different flood history. I show that flood history determines the extent to which events are anticipated and insured. Flood surprises in communities with high pre-flood growth reduce population and do not affect house prices. In the rest they cause reduction in prices and no population effect.

• 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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