Efficient Adaptation to Flood Risk

Winston P. Hovekamp and Katherine R. H. Wagner

AEA Papers and Proceedings, 2023, vol. 113, 304-09

Abstract: This paper studies whether private adaptation to flood risk is economically efficient. We estimate the return to elevating houses, one of the most significant private defensive investments against flooding, using two decades of microdata on the universe of houses and flood damages in high-risk flood zones in the Atlantic and Gulf Coast United States. We find that undertaking adaptation is socially optimal in the highest-risk areas over a house's lifetime but that individual homeowners may underinvest in flood protection because the benefits do not accrue over their average tenure. We identify conditions under which adaptation yields the highest returns.

JEL-codes: G22 G28 Q54 R31 R38 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/pandp.20231103 (application/pdf)
https://doi.org/10.3886/E190547V1 (text/html)
https://www.aeaweb.org/doi/10.1257/pandp.20231103.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/pandp.20231103.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:apandp:v:113:y:2023:p:304-09

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/subscribe.html

DOI: 10.1257/pandp.20231103

Access Statistics for this article

AEA Papers and Proceedings is currently edited by William Johnson and Kelly Markel

More articles in AEA Papers and Proceedings from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().