Sorting over flood risk and implications for policy reform

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2 Scopus citations

Abstract

Do individuals sort across flood risk? This paper applies a boundary discontinuity design to a residential sorting model to provide novel estimates of sorting across flood risk by race, ethnicity, and income. We find clear evidence that low income and minority residents are more likely to move into high risk flood zones. We then highlight the overall and distributional implications of proposed price and information reforms to the U.S. National Flood Insurance Program. While such reforms are likely welfare increasing overall, heterogeneous behavioral responses yield significant distributive effects that also alter the composition of residents in harm's way.

Original languageEnglish (US)
Article number102362
JournalJournal of Environmental Economics and Management
Volume104
DOIs
StatePublished - Nov 2020

Keywords

  • Distributional impacts
  • Flood insurance
  • Flood risk
  • Policy reform
  • Sorting

ASJC Scopus subject areas

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

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