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Information Matters: Evidence from flood risk in the Irish housing market

Tom Gillespie (), Ronan Lyons () and Thomas McDermott ()
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Tom Gillespie: Department of Economics, Trinity College Dublin
Thomas McDermott: Discipline of Economics, NUI Galway

Economic Papers from Trinity College Dublin, Economics Department

Abstract: In this paper, we test the effect of new information about flood risk on housing prices in Ireland. Our core finding is that information matters. Sales prices responded dramatically to the release of flood risk maps in 2011, with the emergence of a 3.1% price discount for dwellings at risk of flooding. This flood discount is not observed prior to the release of the new risk information, for dwellings defended by flood relief schemes, or for rental dwellings. We also document public attitudes to flood risk through survey findings that suggest a continuing information deficit in relation to flood risk.

Keywords: Flood Hazards; Hedonic Prices; Urban Planning; Information Updating; Risk Assessments (search for similar items in EconPapers)
JEL-codes: H54 Q54 R21 (search for similar items in EconPapers)
Pages: 114 pages
Date: 2020-07
New Economics Papers: this item is included in nep-rmg and nep-ure
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