Three essays on risk perception, flooding, and housing market outcomes




Plough, Julian

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One of the impacts of a changing climate is the increase in frequency of extreme weather events, many associated with flooding. Flooding incidence can take various forms determined by individual contexts. These events can be highly localized nuisances or geographically ubiquitous, associated with coastal or inland storms, functions of local infrastructure or residential location, and more. Vulnerability to flooding is a product of these physical realities as well as social interactions. Wealth and federal and local administrative systems can provide resiliencies, and informational systems can mediate opportunities for individuals to assess and update their perceptions of risk. Poorer and lower lying localities and the individuals who reside in them often face different sets of constraints than wealthier and physically less-at-risk counterparts. Behavioral responses to flooding incidence are therefore responses to an amalgamation of realities, both constant and changing. Choices related to residential location provide key insight into the decision- making processes that individuals employ in these complex contexts. The policy-making context surrounding flooding and projected climate change revolves around not only projections of changes in physical incidence, but also the assumed behavioral response to that risk. It is crucial to assess now, in response to extant weather events and frequency changes, behavior that lends insight into the degree to which individuals and populations adapt and adjust. Current examples of resilience, vulnerability, and the lines upon which these determinations fall can provide instrumental inputs to guide forward-looking policy decisions. In this dissertation I focus on housing decisions in three major Gulf Coastal cities as a window into the updating and adaptation processes of individuals that scale into shared behavior. In my first paper I estimate the impact of hurricanes in Houston, TX and Tampa, FL on home transaction prices using a causal difference-in-difference strategy. In this paper I find inconsistent causal estimates of the impacts of flooding and flood risk by market and storm. In my second paper I employ a refined measure of flooding events using the National Flood Insurance Program’s redacted claims dataset and recover consistent causal impacts of localized flood damage claims in Houston, TX. In these first two paper I use transaction prices to make market-based welfare inferences, however the decision to sell or to remain in place presents a story of adaption to itself. In my final paper I employ a survival analysis of the home-sale decision post- Hurricane Katrina in New Orleans, LA where I find that income and race are linked to differential sale rates after the experience of the storm. In this dissertation I use three novel datasets, propose repeatable methods for future work, and employ several econometric and statistical lenses to lend insight into behavioral changes in flooding-related housing decisions that can inform policy.



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