Effects of Flood Hazards on Property Values: Evidence Before and After Hurricane Floyd

Okmyung Bin and Stephen Polasky


This study uses a hedonic property price function to estimate the effects of flood hazards on residential property value. Utilizing data from sales of 8,000 single-family residential homes between 1992 and 2002 in Pitt County, North Carolina, an area that experienced significant flooding from Hurricane Floyd in September 1999, we find that a house located within a floodplain has a lower market value than an equivalent house located outside the floodplain. Furthermore, the price discount from locating within a floodplain is significantly larger after Hurricane Floyd than before. (JEL Q54)