Excess vulnerability from subsidized flood insurance
We calculate there are 8.1% more houses in Allegheny County, PA (Pittsburgh) due to flood insurance subsidies. Conversely, if/when National Flood Insurance Program (NFIP) premiums rise by 50% to equal expected damages, property values will decrease by 8.8% in the short-term, with about half of that recuperated in the long run (4.7%) as quality-adjusted housing stocks contract by 7.5% over decades. This analysis informs community planning and current NFIP revisions that strive to balance solvency and social consequences. Furthermore, our extension of Poterba's (1984) dynamic user-cost of housing model can be used in integrated assessment models of climate change adaptation.
Electronic version of an article published as Climate Change Economics, Volume 12, No. 01 https://doi.org/10.1142/S2010007820500128 © [copyright World Scientific Publishing Company] https://www.worldscientific.com/worldscinet/cce
|Work Title||Excess vulnerability from subsidized flood insurance|
|Subtitle||Housing market adaptation when premiums equal expected flood damage|
|License||In Copyright (Rights Reserved)|
|Publication Date||February 1, 2021|
|Publisher Identifier (DOI)||
|Deposited||November 15, 2021|
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