Racial Gaps in Federal Flood Buyout Compensations

Kay Jowers, Lala Ma and Christopher D. Timmins

AEA Papers and Proceedings, 2023, vol. 113, 451-55

Abstract: In a managed retreat, or "buyout," program, homeowners are offered their property's fair-market value to relocate from a flood-prone area. Using a nationwide sample of federal buyout acquisitions and the universe of US housing transactions over the last two decades, we estimate whether the discount in buyout price compensation, calculated using a hedonic prediction model, depends on a homeowner's race. We provide the first systematic evidence of inequitable compensation in a federal buyout program using nationwide administrative data. Disproportionate compensation, in an attempt to adapt to a warming climate, may further widen the wealth and social mobility gaps.

JEL-codes: D31 D63 J15 Q54 Q58 R38 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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DOI: 10.1257/pandp.20231131

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