AffiliationUniv Arizona, Sch Govt & Publ Policy
MetadataShow full item record
CitationBakkensen, L. A., Ding, X., & Ma, L. (2019). Flood Risk and Salience: New Evidence from the Sunshine State. Southern Economic Journal.
JournalSOUTHERN ECONOMIC JOURNAL
Rights© 2019 by the Southern Economic Association
Collection InformationThis item from the UA Faculty Publications collection is made available by the University of Arizona with support from the University of Arizona Libraries. If you have questions, please contact us at firstname.lastname@example.org.
AbstractA growing literature finds evidence that flood risk salience varies over time, spiking directly following a flood and then falling off individuals' cognitive radar in the following years. In this article, we provide new evidence of salience exploiting a hurricane cluster impacting Florida that was preceded and followed by periods of unusual calm. Utilizing residential property sales across the state from 2002 through 2012, our main estimate finds a salience impact of -8%, on average. The salience effect persists when we base estimation only on spatial variation in prices to limit confounding from other simultaneous changes due to shifting hedonic equilibria over time. These effects range from housing prices decreases of 5.4-12.3% depending on the year of sale. Understanding flood risk salience has important implications for flood insurance and disaster policy, the benefits transfer literature, and, more broadly, our understanding of natural disaster resilience. JEL Classification: Q51, Q54, R21
Note12 month embargo; first published: 08 March 2019
VersionFinal accepted manuscript