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Information Matters: Evidence from flood risk in the Irish housing market

Author

Listed:
  • Tom Gillespie

    (Department of Economics, Trinity College Dublin)

  • Ronan C. Lyons

    (Department of Economics, Trinity College Dublin)

  • Thomas K. J. McDermott

    (Discipline of Economics, NUI Galway)

Abstract

In this paper, we test the effect of new information about flood risk on housing prices in Ireland. Our core finding is that information matters. Sales prices responded dramatically to the release of flood risk maps in 2011, with the emergence of a 3.1% price discount for dwellings at risk of flooding. This flood discount is not observed prior to the release of the new risk information, for dwellings defended by flood relief schemes, or for rental dwellings. We also document public attitudes to flood risk through survey findings that suggest a continuing information deficit in relation to flood risk.

Suggested Citation

  • Tom Gillespie & Ronan C. Lyons & Thomas K. J. McDermott, 2020. "Information Matters: Evidence from flood risk in the Irish housing market," Trinity Economics Papers tep1620, Trinity College Dublin, Department of Economics.
    • Handle: RePEc:tcd:tcduee:tep1620
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    File URL: https://www.tcd.ie/Economics/TEP/2020/TEP1620.pdf
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    More about this item

    Keywords

    Flood Hazards; Hedonic Prices; Urban Planning; Information Updating; Risk Assessments;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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