Beyond the Flood: Media Coverage of Flood Events and Property Valuation

We use major flood events in Florida as exogenous climate events, we assess the role of news coverage and sentiment on property values. Our analysis draws on a rich panel of Florida property transactions, covering the period from 2000 to 2022, which allows us to control for a wide set of user and property characteristics. We find that properties in flood-affected areas experience significant price discounts. These discounts are amplified in cases of negative sentiment and lack of coverage. Indeed, we observe that coverage of flood events is not reliable, as media tends to focus on certain areas, and the coverage is not purely driven by the extent of the damage. Out-of-state buyers demand larger discounts than in-state buyers, as they are more reliant on those information sources. We employ both difference-in-difference and propensity score matching approaches, which support the causality of our findings.