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Assessing the economic benefits of flood defenses: a repeat-sales approach

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  • Beltrán, Allan
  • Maddison, David
  • Elliott, Robert J. R.

Abstract

In this article we identify the impact of the construction of flood defenses on property prices using a difference‐in‐differences repeat‐sales methodology. Our data set contains information on over 12 million individual property transactions, which is merged with GIS data identifying the spatial location and main characteristics of 1,666 flood defenses built in England between 1995 and 2014. Results suggest that at the finer 6‐digit postcode level the construction of flood defenses raises urban house prices by 12.6% to 16.7%. However, for rural properties at the slightly coarser 5‐digit postcode level the construction of defenses reduces house prices by 0.8% to 5.0%. This suggests that in certain locations the disamenity impact of flood defenses and the perceived threat of redirected flooding outweigh the benefits of reduced flood risk

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  • Beltrán, Allan & Maddison, David & Elliott, Robert J. R., 2018. "Assessing the economic benefits of flood defenses: a repeat-sales approach," LSE Research Online Documents on Economics 90207, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:90207
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    Cited by:

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    3. 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).
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    5. Liang, Cong & Huang, Yaoxuan & Yip, Tsz Leung & Li, Victor Jing, 2022. "Does rail transit development gentrify neighborhoods? Evidence from Hong Kong," Transportation Research Part A: Policy and Practice, Elsevier, vol. 155(C), pages 354-372.

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    More about this item

    Keywords

    Difference-in-differences; flood defences; flood risk; hedonic price method; house prices; repeat-sales;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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