Forgetting the Flood? An Analysis of the Flood Risk Discount over Time

Ajita Atreya, Susana Ferreira and Warren Kriesel

Land Economics, 2013, vol. 89, issue 4

Abstract: We examine whether property price differentials reflecting flood risk increase following a large flood event, and whether this change is temporary or permanent. We use single-family residential property sales in Dougherty County, Georgia, between 1985 and 2004 in a difference-in-differences spatial hedonic model framework. After the 1994 “flood of the century,” prices of properties in the 100-year floodplain fell significantly. This effect was, however, short-lived. In spatial hedonic models that explicitly incorporate both linear and nonlinear temporal flood-zone effects, we show that the flood risk discount disappeared between four and nine years after the flood, depending upon the specification.

JEL-codes: Q51 Q54 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (127)

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