Flood Risk Mapping and the Distributional Impacts of Climate Information
Joakim A. Weill
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Joakim A. Weill: https://joakimweill.github.io/
No 2023-066, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)
Abstract:
This paper examines the provision of official flood risk information in the United States and its distributional impacts on residential flood insurance take-up. Assembling new data on all flood maps produced after Hurricane Katrina, I first document that updated maps decreased the number of properties zoned in high-risk floodplains and incorrectly omitted five million properties that should have been rezoned inside these areas. Removals and omissions disproportionately occurred in neighborhoods with more Black and Hispanic residents. Leveraging the staggered timing of map updates, I estimate they decreased flood insurance take-up and exacerbated racial disparities in insurance coverage. These effects are driven by beliefs about risks and regulatory constraints. Correcting flood maps could increase welfare by $20 billion annually, but past updates decreased welfare due to distorted risk and price signals.
Keywords: Applied Econometrics; Climate Adaptation; Disaster Insurance; Environmental Inequalities; Flood Risk; Information Provision (search for similar items in EconPapers)
JEL-codes: D40 G52 H40 Q54 Q58 R14 R52 (search for similar items in EconPapers)
Pages: 95 p.
Date: 2023-10-11
New Economics Papers: this item is included in nep-env and nep-ure
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https://www.federalreserve.gov/econres/feds/files/2023066pap.pdf (application/pdf)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2023-66
DOI: 10.17016/FEDS.2023.066
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