Analysis of Spatial Variation in Flood Risk Perception

Ajita Atreya and Susana Ferreira

No 119738, 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama from Southern Agricultural Economics Association

Abstract: We use hedonic property models to estimate the spatial variation in flood risk in the city of Albany, GA. In addition to knowing whether a property is in the floodplain, we have a unique dataset with actual inundation maps from tropical storm Alberto that hit Albany in 1994. In the absence of information on the structural damages caused by a flood, having information on the actual inundated area can be useful to tease out information effect of a new flood from potential reconstruction cost. We find that the discount in actually inundated properties is larger which supports our hypothesis that homeowners respond better to what they have visualized (“seeing is believing”) and also the potential reconstruction cost in addition to information effect is capitalized in property prices.

Keywords: Environmental Economics and Policy; Land Economics/Use (search for similar items in EconPapers)
Pages: 22
Date: 2012
New Economics Papers: this item is included in nep-env and nep-geo
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Persistent link: https://EconPapers.repec.org/RePEc:ags:saea12:119738

DOI: 10.22004/ag.econ.119738

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