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Public Flood Risk Mitigation and the Homeowner’s Insurance Demand Response

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  • Stefan Borsky
  • Hannah Hennighausen

Abstract

This article investigates the influence of public risk mitigating activities on individuals’ decisions to privately mitigate their disaster risks through changes in their risk perceptions. We exploit heterogeneity in measures under the U.S. Community Rating System to empirically demonstrate that public investment in flood risk communication activities crowds in individuals’ flood insurance demand, while activities that lower the flood hazard residents face crowd out individuals’ flood insurance demand. We contribute to the discussion of the efficacy of disaster risk mitigation strategies and who ultimately bears the costs of natural disasters.

Suggested Citation

  • Stefan Borsky & Hannah Hennighausen, 2022. "Public Flood Risk Mitigation and the Homeowner’s Insurance Demand Response," Land Economics, University of Wisconsin Press, vol. 98(4), pages 537-559.
    • Handle: RePEc:uwp:landec:v:98:y:2022:i:4:p:537-559
    Note: DOI: 10.3368/le.98.4.061720-0088R2
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    Cited by:

    1. Liao, Yanjun (Penny) & Sølvsten, Simon & Whitlock, Zachary, 2024. "Community Responses to Flooding in Risk Mitigation Actions: Evidence from the Community Rating System," RFF Working Paper Series 24-08, Resources for the Future.

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    More about this item

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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