Sorting over flood risk and implications for policy reform

Laura A. Bakkensen and Lala Ma

Journal of Environmental Economics and Management, 2020, vol. 104, issue C

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.

Keywords: Sorting; Flood risk; Distributional impacts; Flood insurance; Policy reform (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (38)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:104:y:2020:i:c:s0095069620300851

DOI: 10.1016/j.jeem.2020.102362

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