Public Flood Risk Mitigation and the Homeowner’s Insurance Demand Response

Stefan Borsky and Hannah Hennighausen

Abstract

This article investigates the influence of public risk mitigating activities on individuals’ decisions to privately mitigate their disaster risks through changes in their risk perceptions. We exploit heterogeneity in measures under the U.S. Community Rating System to empirically demonstrate that public investment in flood risk communication activities crowds in individuals’ flood insurance demand, while activities that lower the flood hazard residents face crowd out individuals’ flood insurance demand. We contribute to the discussion of the efficacy of disaster risk mitigation strategies and who ultimately bears the costs of natural disasters.

JEL

This article requires a subscription to view the full text. If you have a subscription you may use the login form below to view the article. Access to this article can also be purchased.

Purchase access

You may purchase access to this article. This will require you to create an account if you don't already have one.