RT Journal Article
SR Electronic
T1 Forgetting the Flood? An Analysis of the Flood Risk Discount over Time
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 577
OP 596
DO 10.3368/le.89.4.577
VO 89
IS 4
A1 Ajita Atreya
A1 Susana Ferreira
A1 Warren Kriesel
YR 2013
UL http://le.uwpress.org/content/89/4/577.abstract
AB We examine whether property price differentials reflecting flood risk increase following a large flood event, and whether this change is temporary or permanent. We use single-family residential property sales in Dougherty County, Georgia, between 1985 and 2004 in a difference-in-differences spatial hedonic model framework. After the 1994 “flood of the century,” prices of properties in the 100-year floodplain fell significantly. This effect was, however, short-lived. In spatial hedonic models that explicitly incorporate both linear and nonlinear temporal flood-zone effects, we show that the flood risk discount disappeared between four and nine years after the flood, depending upon the specification. (JEL Q51, Q54)