Flood Risk, Local Hazard Mitigation, and the Community Rating System of the National Flood Insurance Program

Jingyuan Li and Craig E. Landry


Using panel data for North Carolina communities, we estimate dynamic regression models of flood mitigation projects as recognized by the Community Rating System (CRS) of the National Flood Insurance Program. We find serial correlation in CRS points, which we interpret as incremental persistence that reflects physical and human capital accumulation. We find greater levels of mitigation in communities with larger tax revenues and lower levels of crime and unemployment, and a weak, but significant, effect due to recent flood experience. Socioeconomic factors also affect hazard mitigation; CRS points are greater in communities with greater median household income and higher population density. (JEL H44, Q54)

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