HKC06 - Information versus attention in flood risk disclosure

Dolores Albarracín and Timothy Hyde
Additional contact information
Timothy Hyde: Department of Economics, Oberlin College, https://www.oberlin.edu/arts-and-sciences/departments/economics

No 2603, Oberlin College Kasper Economics and Business Working Papers Series from Oberlin College, Department of Economics

Abstract: Flood risk disclosure is expanding rapidly in real estate markets, but if disclosures move demand by commanding attention rather than by conveying information, theirwelfare effects are ambiguous. We examine this tension in a discrete choice experiment where 1,498 respondents make hypothetical choices among real Gulf Coast properties under a control condition and four disclosure formats varying in informational content and presentation. Absent disclosure, insurance costs barely influence choices; by contrast, when respondents are shown precise flood insurance estimates, they are willing to pay $3.34 in annualized housing costs to avoid each annual premium dollar. Using a separate beliefs elicitation, we estimate each format’s technical information content and construct a Bayesian benchmark for how much choices should respond. Observed responses exceed this benchmark by a factor of four to six; informational content accounts for at most 30 percent of the response to any format.

Keywords: Flood risk; Risk disclosure; Salience; Attention; Willingness to pay; Stated preferences (search for similar items in EconPapers)
JEL-codes: D83 D91 G22 Q54 R31 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2026-07-01
References: Add references at CitEc
Citations:

Downloads: (external link)
https://digitalcommons.oberlin.edu/cgi/viewcontent ... ontext=economics_wps (application/pdf)

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:cxv:wpaper:2603

Access Statistics for this paper

More papers in Oberlin College Kasper Economics and Business Working Papers Series from Oberlin College, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by M. Udara Peiris ().