IDEAS home Printed from https://ideas.repec.org/a/spr/ediscc/v3y2019i3d10.1007_s41885-019-00045-z.html
   My bibliography  Save this article

Valuing Seawall Protection in the Wake of Hurricane Ike

Author

Listed:
  • Meri Davlasheridze

    (Texas A&M University)

  • Qin Fan

    (California State University)

Abstract

This paper estimates the value of seawall protection in the wake of Hurricane Ike using a difference-in-difference and fixed-effects type quasi-experimental approach. The analysis is based on residential housing transactions in Galveston, Texas from 2000 to 2014. The results suggest a positive price premium of up to 22% for seawall protected homes. The positive effect is found to be the highest after the occurrence of Hurricane Ike. Although as memory fades away the effect began decreasing gradually, the price premium of seawall protection still persists six years after Hurricane Ike.

Suggested Citation

  • Meri Davlasheridze & Qin Fan, 2019. "Valuing Seawall Protection in the Wake of Hurricane Ike," Economics of Disasters and Climate Change, Springer, vol. 3(3), pages 257-279, October.
    • Handle: RePEc:spr:ediscc:v:3:y:2019:i:3:d:10.1007_s41885-019-00045-z
    DOI: 10.1007/s41885-019-00045-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s41885-019-00045-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s41885-019-00045-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Muehlenbachs, Lucija & Spiller, Elisheba & Timmins, Christopher, "undated". "The Housing Market Impacts of Shale Gas Development," Discussion Papers dp-13-39-rev, Resources For the Future.
    2. Smith, Martin D. & Slott, Jordan M. & McNamara, Dylan & Brad Murray, A., 2009. "Beach nourishment as a dynamic capital accumulation problem," Journal of Environmental Economics and Management, Elsevier, vol. 58(1), pages 58-71, July.
    3. Meghan R. Busse & Christopher R. Knittel & Florian Zettelmeyer, 2013. "Are Consumers Myopic? Evidence from New and Used Car Purchases," American Economic Review, American Economic Association, vol. 103(1), pages 220-256, February.
    4. Carolyn Kousky & Erzo Luttmer & Richard Zeckhauser, 2006. "Private investment and government protection," Journal of Risk and Uncertainty, Springer, vol. 33(1), pages 73-100, September.
    5. Lucija Muehlenbachs & Elisheba Spiller & Christopher Timmins, 2015. "The Housing Market Impacts of Shale Gas Development," American Economic Review, American Economic Association, vol. 105(12), pages 3633-3659, December.
    6. Gopalakrishnan, Sathya & Smith, Martin D. & Slott, Jordan M. & Murray, A. Brad, 2011. "The value of disappearing beaches: A hedonic pricing model with endogenous beach width," Journal of Environmental Economics and Management, Elsevier, vol. 61(3), pages 297-310, May.
    7. Iacus, Stefano & King, Gary & Porro, Giuseppe, 2009. "cem: Software for Coarsened Exact Matching," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 30(i09).
    8. DelRossi, Alison F. & Inman, Robert P., 1999. "Changing the price of pork: the impact of local cost sharing on legislators' demands for distributive public goods," Journal of Public Economics, Elsevier, vol. 71(2), pages 247-273, February.
    9. N. Edward Coulson & Jeffrey E. Zabel, 2013. "What Can We Learn from Hedonic Models When Housing Markets Are Dominated by Foreclosures?," Annual Review of Resource Economics, Annual Reviews, vol. 5(1), pages 261-279, June.
    10. Margaret Walls & Carolyn Kousky & Ziyan Chu, 2015. "Is What You See What You Get? The Value of Natural Landscape Views," Land Economics, University of Wisconsin Press, vol. 91(1), pages 1-19.
    11. Kelly C. Bishop & Alvin D. Murphy, 2019. "Valuing Time-Varying Attributes Using the Hedonic Model: When Is a Dynamic Approach Necessary?," The Review of Economics and Statistics, MIT Press, vol. 101(1), pages 134-145, March.
    12. Carolyn Kousky, 2014. "Managing shoreline retreat: a US perspective," Climatic Change, Springer, vol. 124(1), pages 9-20, May.
    13. Carolyn Kousky, 2017. "Disasters as Learning Experiences or Disasters as Policy Opportunities? Examining Flood Insurance Purchases after Hurricanes," Risk Analysis, John Wiley & Sons, vol. 37(3), pages 517-530, March.
    14. Elisabeth Krausmann & Ana Cruz, 2013. "Impact of the 11 March 2011, Great East Japan earthquake and tsunami on the chemical industry," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 67(2), pages 811-828, June.
    15. Abadie, Alberto & Imbens, Guido W., 2011. "Bias-Corrected Matching Estimators for Average Treatment Effects," Journal of Business & Economic Statistics, American Statistical Association, vol. 29(1), pages 1-11.
    16. Matthew Blackwell & Stefano Iacus & Gary King & Giuseppe Porro, 2009. "cem: Coarsened exact matching in Stata," Stata Journal, StataCorp LP, vol. 9(4), pages 524-546, December.
    17. Abbott, Joshua K. & Allen Klaiber, H., 2013. "The value of water as an urban club good: A matching approach to community-provided lakes," Journal of Environmental Economics and Management, Elsevier, vol. 65(2), pages 208-224.
    18. Randy Dumm & G. Sirmans & Greg Smersh, 2011. "The Capitalization of Building Codes in House Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 42(1), pages 30-50, January.
    19. Craig E. Landry & Paul Hindsley, 2011. "Valuing Beach Quality with Hedonic Property Models," Land Economics, University of Wisconsin Press, vol. 87(1), pages 92-108.
    20. Ashenfelter, Orley & Card, David, 1985. "Using the Longitudinal Structure of Earnings to Estimate the Effect of Training Programs," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 648-660, November.
    21. Hallstrom, Daniel G. & Smith, V. Kerry, 2005. "Market responses to hurricanes," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 541-561, November.
    22. H. Spencer Banzhaf & Randall P. Walsh, 2008. "Do People Vote with Their Feet? An Empirical Test of Tiebout," American Economic Review, American Economic Association, vol. 98(3), pages 843-863, June.
    23. Kousky, Carolyn & Walls, Margaret, 2014. "Floodplain conservation as a flood mitigation strategy: Examining costs and benefits," Ecological Economics, Elsevier, vol. 104(C), pages 119-128.
    24. Frederick W. Bell, 1986. "Economic Policy Issues Associated With Beach Renourishment," Review of Policy Research, Policy Studies Organization, vol. 6(2), pages 374-381, November.
    25. Erica Myers, 2019. "Are Home Buyers Inattentive? Evidence from Capitalization of Energy Costs," American Economic Journal: Economic Policy, American Economic Association, vol. 11(2), pages 165-188, May.
    26. Laura A. Bakkensen & Xiaozhou Ding & Lala Ma, 2019. "Flood Risk and Salience: New Evidence from the Sunshine State," Southern Economic Journal, John Wiley & Sons, vol. 85(4), pages 1132-1158, April.
    27. Alberto Abadie, 2005. "Semiparametric Difference-in-Differences Estimators," Review of Economic Studies, Oxford University Press, vol. 72(1), pages 1-19.
    28. Ajita Atreya & Susana Ferreira & Warren Kriesel, 2013. "Forgetting the Flood? An Analysis of the Flood Risk Discount over Time," Land Economics, University of Wisconsin Press, vol. 89(4), pages 577-596.
    29. Carolyn Kousky, 2010. "Learning from Extreme Events: Risk Perceptions after the Flood," Land Economics, University of Wisconsin Press, vol. 86(3).
    30. Justin Gallagher, 2014. "Learning about an Infrequent Event: Evidence from Flood Insurance Take-Up in the United States," American Economic Journal: Applied Economics, American Economic Association, vol. 6(3), pages 206-233, July.
    31. Davlasheridze, Meri & Fisher-Vanden, Karen & Allen Klaiber, H., 2017. "The effects of adaptation measures on hurricane induced property losses: Which FEMA investments have the highest returns?," Journal of Environmental Economics and Management, Elsevier, vol. 81(C), pages 93-114.
    32. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    33. Daniel Burleson & Hanadi Rifai & Jennifer Proft & Clint Dawson & Philip Bedient, 2015. "Vulnerability of an industrial corridor in Texas to storm surge," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 77(2), pages 1183-1203, June.
    34. Leigh Linden & Jonah E. Rockoff, 2008. "Estimates of the Impact of Crime Risk on Property Values from Megan's Laws," American Economic Review, American Economic Association, vol. 98(3), pages 1103-1127, June.
    35. Qin Fan & J. Hansz & Xiaoming Yang, 2016. "The Pricing Effects of Open Space Amenities," The Journal of Real Estate Finance and Economics, Springer, vol. 52(3), pages 244-271, April.
    36. Brown, Gardner M, Jr & Pollakowski, Henry O, 1977. "Economic Valuation of Shoreline," The Review of Economics and Statistics, MIT Press, vol. 59(3), pages 272-278, August.
    37. Meri Davlasheridze & Kayode O. Atoba & Samuel Brody & Wesley Highfield & William Merrell & Bruce Ebersole & Adam Purdue & Robert W. Gilmer, 2019. "Economic impacts of storm surge and the cost-benefit analysis of a coastal spine as the surge mitigation strategy in Houston-Galveston area in the USA," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 24(3), pages 329-354, March.
    38. Kuminoff, Nicolai V. & Parmeter, Christopher F. & Pope, Jaren C., 2010. "Which hedonic models can we trust to recover the marginal willingness to pay for environmental amenities?," Journal of Environmental Economics and Management, Elsevier, vol. 60(3), pages 145-160, November.
    39. Fell, Harrison & Kousky, Carolyn, 2015. "The value of levee protection to commercial properties," Ecological Economics, Elsevier, vol. 119(C), pages 181-188.
    40. Dylan E McNamara & Sathya Gopalakrishnan & Martin D Smith & A Brad Murray, 2015. "Climate Adaptation and Policy-Induced Inflation of Coastal Property Value," PLOS ONE, Public Library of Science, vol. 10(3), pages 1-12, March.
    41. John Y. Campbell & Stefano Giglio & Parag Pathak, 2011. "Forced Sales and House Prices," American Economic Review, American Economic Association, vol. 101(5), pages 2108-2131, August.
    42. Ajita Atreya & Susana Ferreira, 2015. "Seeing is Believing? Evidence from Property Prices in Inundated Areas," Risk Analysis, John Wiley & Sons, vol. 35(5), pages 828-848, May.
    43. Iacus, Stefano M. & King, Gary & Porro, Giuseppe, 2012. "Causal Inference without Balance Checking: Coarsened Exact Matching," Political Analysis, Cambridge University Press, vol. 20(1), pages 1-24, January.
    44. Mark A. Saunders & Adam S. Lea, 2008. "Large contribution of sea surface warming to recent increase in Atlantic hurricane activity," Nature, Nature, vol. 451(7178), pages 557-560, January.
    45. Bin, Okmyung & Landry, Craig E., 2013. "Changes in implicit flood risk premiums: Empirical evidence from the housing market," Journal of Environmental Economics and Management, Elsevier, vol. 65(3), pages 361-376.
    46. Dundas, Steven J., 2017. "Benefits and ancillary costs of natural infrastructure: Evidence from the New Jersey coast," Journal of Environmental Economics and Management, Elsevier, vol. 85(C), pages 62-80.
    47. Okmyung Biny & Stephen Polasky, 2004. "Effects of Flood Hazards on Property Values: Evidence Before and After Hurricane Floyd," Land Economics, University of Wisconsin Press, vol. 80(4).
    48. Russell McKenzie & John Levendis, 2010. "Flood Hazards and Urban Housing Markets: The Effects of Katrina on New Orleans," The Journal of Real Estate Finance and Economics, Springer, vol. 40(1), pages 62-76, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Emily Fucile-Sanchez & Meri Davlasheridze, 2020. "Adjustments of Socially Vulnerable Populations in Galveston County, Texas USA Following Hurricane Ike," Sustainability, MDPI, vol. 12(17), pages 1-23, August.
    2. Judith Taylor & Norman S. Levine & Ernest Muhammad & Dwayne E. Porter & Annette M. Watson & Paul A. Sandifer, 2022. "Participatory and Spatial Analyses of Environmental Justice Communities’ Concerns about a Proposed Storm Surge and Flood Protection Seawall," IJERPH, MDPI, vol. 19(18), pages 1-29, September.
    3. Meri Davlasheridze & Qing Miao, 2021. "Does post-disaster aid promote community resilience? Evidence from federal disaster programs," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 109(1), pages 63-88, October.
    4. Pollack, Adam B. & Kaufmann, Robert K., 2022. "Increasing storm risk, structural defense, and house prices in the Florida Keys," Ecological Economics, Elsevier, vol. 194(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Qiu, Yun & Gopalakrishnan, Sathya, 2018. "Shoreline defense against climate change and capitalized impact of beach nourishment," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 134-147.
    2. Yun Qiu & Sathya Gopalakrishnan & H. Allen Klaiber & Xiaoyu Li, 2020. "Dredging the sand commons: the economic and geophysical drivers of beach nourishment," Climatic Change, Springer, vol. 162(2), pages 363-383, September.
    3. David Wolf & Kenji Takeuchi, 2022. "Who Gives a Dam? Capitalization of Flood Protection in Fukuoka, Japan," Discussion Papers 2203, Graduate School of Economics, Kobe University.
    4. Georgic, Will & Klaiber, H. Allen, 2022. "Stocks, flows, and flood insurance: A nationwide analysis of the capitalized impact of annual premium discounts on housing values," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).
    5. Seung Kyum Kim, 2020. "The Economic Effects of Climate Change Adaptation Measures: Evidence from Miami-Dade County and New York City," Sustainability, MDPI, vol. 12(3), pages 1-19, February.
    6. Allan Beltrán & David Maddison & Robert J. R. Elliott, 2018. "Assessing the Economic Benefits of Flood Defenses: A Repeat‐Sales Approach," Risk Analysis, John Wiley & Sons, vol. 38(11), pages 2340-2367, November.
    7. Joshua S. Graff Zivin & Yanjun Liao & Yann Panassie, 2020. "How Hurricanes Sweep Up Housing Markets: Evidence from Florida," NBER Working Papers 27542, National Bureau of Economic Research, Inc.
    8. McCoy, Shawn J. & Walsh, Randall P., 2018. "Wildfire risk, salience & housing demand," Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 203-228.
    9. Beltrán, Allan & Maddison, David & Elliott, Robert, 2019. "The impact of flooding on property prices: A repeat-sales approach," Journal of Environmental Economics and Management, Elsevier, vol. 95(C), pages 62-86.
    10. Robert J. Johnston & Klaus Moeltner, 2019. "Special Flood Hazard Effects on Coastal and Interior Home Values: One Size Does Not Fit All," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(1), pages 181-210, September.
    11. H. Spencer Banzhaf, 2021. "Difference-in-Differences Hedonics," Journal of Political Economy, University of Chicago Press, vol. 129(8), pages 2385-2414.
    12. Maha AbdelHalim & Jean Dubé & Nicolas Devaux, 2021. "The Spatial and Temporal Decomposition of the Effect of Floods on Single-Family House Prices: A Laval, Canada Case Study," Sustainability, MDPI, vol. 13(9), pages 1-18, May.
    13. Laura A. Bakkensen & Xiaozhou Ding & Lala Ma, 2019. "Flood Risk and Salience: New Evidence from the Sunshine State," Southern Economic Journal, John Wiley & Sons, vol. 85(4), pages 1132-1158, April.
    14. Dundas, Steven J., 2017. "Benefits and ancillary costs of natural infrastructure: Evidence from the New Jersey coast," Journal of Environmental Economics and Management, Elsevier, vol. 85(C), pages 62-80.
    15. Guignet, Dennis & Jenkins, Robin & Ranson, Matthew & Walsh, Patrick J., 2018. "Contamination and incomplete information: Bounding implicit prices using high-profile leaks," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 259-282.
    16. Coulson, N. Edward & McCoy, Shawn J. & McDonough, Ian K., 2020. "Economic diversification and the resiliency hypothesis: Evidence from the impact of natural disasters on regional housing values," Regional Science and Urban Economics, Elsevier, vol. 85(C).
    17. James R. Meldrum, 2016. "Floodplain Price Impacts by Property Type in Boulder County, Colorado: Condominiums Versus Standalone Properties," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(4), pages 725-750, August.
    18. Meri Davlasheridze & Qing Miao, 2019. "Does Governmental Assistance Affect Private Decisions to Insure? An Empirical Analysis of Flood Insurance Purchases," Land Economics, University of Wisconsin Press, vol. 95(1), pages 124-145.
    19. Georgic, Will C. & Klaiber, Allen, 2018. "Identifying the Costs to Homeowners of Eliminating NFIP Subsidies," 2018 Annual Meeting, August 5-7, Washington, D.C. 274444, Agricultural and Applied Economics Association.
    20. José Armando Cobián Álvarez & Budy P. Resosudarmo, 2019. "The cost of floods in developing countries’ megacities: a hedonic price analysis of the Jakarta housing market, Indonesia," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 21(4), pages 555-577, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:ediscc:v:3:y:2019:i:3:d:10.1007_s41885-019-00045-z. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.springer.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.