Flood Risk and Salience: New Evidence from the Sunshine State.

A growing literature finds evidence that flood risk salience varies over time, spiking directly following a flood and then falling off individuals' cognitive radar in the following years. In this article, we provide new evidence of salience exploiting a hurricane cluster impacting Florida that was p...

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Publicado en:Southern Economic Journal Vol. 85; no. 4; pp. 1132 - 1159
Autores principales: Bakkensen, Laura A., Ding, Xiaozhou, Ma, Lala
Formato: Artículo
Publicado: Wiley-Blackwell Apr2019
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: Flood Risk and Salience: New Evidence from the Sunshine State.
      aug:
        au:
          Bakkensen, Laura A.
          Ding, Xiaozhou
          Ma, Lala
      su:
        Florida
        Hurricanes
        Flood risk
        Home prices
        Spatial variation
        Flood insurance
        Disaster resilience
      sug:
        subj:
          Hurricanes
          Florida
          Flood risk
          Home prices
          Spatial variation
          Flood insurance
          Disaster resilience
      keyword:
        Q51
        Q54
        R21
        Q51
        Q54
        R21
      ab: A growing literature finds evidence that flood risk salience varies over time, spiking directly following a flood and then falling off individuals' cognitive radar in the following years. In this article, we provide new evidence of salience exploiting a hurricane cluster impacting Florida that was preceded and followed by periods of unusual calm. Utilizing residential property sales across the state from 2002 through 2012, our main estimate finds a salience impact of −8%, on average. The salience effect persists when we base estimation only on spatial variation in prices to limit confounding from other simultaneous changes due to shifting hedonic equilibria over time. These effects range from housing prices decreases of 5.4–12.3% depending on the year of sale. Understanding flood risk salience has important implications for flood insurance and disaster policy, the benefits transfer literature, and, more broadly, our understanding of natural disaster resilience. JEL Classification: Q51, Q54, R21
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