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Flood protection and endogenous sorting of households: the role of credit constraints

Trond Husby (), Henri de Groot (), Marjan Hofkes () and Tatiana Filatova ()
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Trond Husby: TNO, Strategy & Policy

Mitigation and Adaptation Strategies for Global Change, 2018, vol. 23, issue 2, No 1, 147-168

Abstract: Abstract Human migration is increasingly seen as a promising climate change adaptation and flood risk reduction strategy. The purpose of this paper is to investigate how spatial differences in flood risk, due to differences in flood protection, reduce the mobility of vulnerable households through a credit constraint mechanism. Using an equilibrium model with two households types and endogenous sorting, we show how spatial differences in flood protection lead to clustering of vulnerable households in a risky region, in a real-world setting of common United States (US) flood zones. We find clustering effects of some size for flood zones with return periods of less than 30 years.

Keywords: Flood protection; Climate change; Adaptation; Tiebout-sorting; Credit constraints (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s11027-015-9667-7

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