Private Benefits from Public Investment in Climate Adaptation and Resilience

Jacob T. Bradt and Joseph Aldy

No 33633, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Flood protection infrastructure investments, such as Army Corps of Engineers levees, can enhance resilience to flood risks amplified by climate change. We estimate levees’ benefits by exploiting repeat residential property transactions. In areas protected by levees, home values increase 3-4 percent. Levees impose adverse spillover flood risks that reduce home values in nearby areas by 1-5 percent. Capitalized benefits in protected areas are progressive, but adverse spillover impacts are regressive. Capitalized benefits at levee construction do not vary by race, but racial sorting occurs post-construction. The local political economy of levee construction can explain the distribution of winners and losers.

JEL-codes: H22 H23 Q54 Q58 (search for similar items in EconPapers)
Date: 2025-03
Note: EEE
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