Adjusting to the New Normal: River Flood Risk and the Real Estate Market

Henri Gruhl (), Johannes Brehm (), Arijit Ghosh, Philipp Breidenbach and Nils aus dem Moore
Additional contact information
Henri Gruhl: Vrije Universiteit Amsterdam
Johannes Brehm: Hertie School
Arijit Ghosh: RWI - Leibniz Institute for Economic Research
Philipp Breidenbach: RWI - Leibniz Institute for Economic Research
Nils aus dem Moore: Hertie School

Environmental & Resource Economics, 2025, vol. 88, issue 9, No 4, 2356 pages

Abstract: Abstract Do individuals learn from salient river floods and update their risk perceptions accordingly? We exploit the Western European flood in 2021 to estimate changes in property values across German flood risk regions. Flood-prone areas in proximity to the flood or with higher climate change beliefs experience housing price declines, while we observe no statistically significant effects in other flood risk zones. Our results imply that flood risk discounts in the housing market will not adjust uniformly, which may result in suboptimal capital allocation in areas at risk of future flooding.

Keywords: Flood risk; House prices; Risk updating; Q54; Q51; D81; R31 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10640-025-00995-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:kap:enreec:v:88:y:2025:i:9:d:10.1007_s10640-025-00995-x

Ordering information: This journal article can be ordered from
http://www.springer. ... al/journal/10640/PS2

DOI: 10.1007/s10640-025-00995-x

Access Statistics for this article

Environmental & Resource Economics is currently edited by Ian J. Bateman

More articles in Environmental & Resource Economics from Springer, European Association of Environmental and Resource Economists Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().