PT  - JOURNAL ARTICLE
AU  - Davlasheridze, Meri
AU  - Miao, Qing
TI  - Does Governmental Assistance Affect Private Decisions to Insure? An Empirical Analysis of Flood Insurance Purchases
AID  - 10.3368/le.95.1.124
DP  - 2019 Feb 01
TA  - Land Economics
PG  - 124--145
VI  - 95
IP  - 1
4099  - http://le.uwpress.org/content/95/1/124.short
4100  - http://le.uwpress.org/content/95/1/124.full
SO  - Land Econ2019 Feb 01; 95
AB  - In this paper, we empirically examine whether the Federal Emergency Management Agency’s Public Assistance (PA) program, which targets postdisaster cleanup and infrastructure rehabilitation, affects household purchases of flood insurance. Using the fixed-effects model with instrumental variables to address the endogeneity of disaster aid, we find that increased PA grants reduce a county’s flood insurance take-up rates, thereby driving down its total insurance coverage and premiums paid. Our findings provide empirical evidence on the crowding-out effect of public disaster programs, and shed light on their implicit social costs and increased federal financial exposure to natural disasters and climate change. (JEL Q54, Q58)