Abstract

ABSTRACT:

We propose a theoretical framework characterizing (1) the attenuation of flood risks revealed by the flood zone designation in flood insurance rate maps and (2) the asymmetric impacts of adding versus removing flood zone status on property values. We apply spatial fixed effects models to empirically investigate the impacts of flood zone status and test the proposed theory. The results indicate that housing values decrease by more than 11% when a property is assigned into a flood zone. However, property values do not rebound when flood zone status is removed. (JEL Q51)

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Additional Information

ISSN
1543-8325
Print ISSN
0023-7639
Pages
pp. 174-192
Launched on MUSE
2019-04-11
Open Access
No
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