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Redistributional Effects of the National Flood Insurance Program

Author

Listed:
  • Bin, Okmyung
  • Bishop, John A.
  • Kousky, Carolyn

    (Resources for the Future)

Abstract

This study examines the redistributional effects of the National Flood Insurance Program (NFIP) using a national database of premium, coverage, and claim payments at the county level between 1980 and 2006. Measuring progressivity as the departure from per capita county income proportionality we find that NFIP premiums are weakly regressive on an annual basis but become proportional as the time horizon is extended beyond a single year. In contrast, we find that NFIP claim payments are moderately progressive over all time horizons studied. In sum, we find no evidence that the NFIP disproportionally advantages richer counties.

Suggested Citation

  • Bin, Okmyung & Bishop, John A. & Kousky, Carolyn, 2011. "Redistributional Effects of the National Flood Insurance Program," RFF Working Paper Series dp-11-14, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-11-14
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-11-14.pdf
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    References listed on IDEAS

    as
    1. Erwann O. Michel‐Kerjan & Carolyn Kousky, 2010. "Come Rain or Shine: Evidence on Flood Insurance Purchases in Florida," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 77(2), pages 369-397, June.
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    Cited by:

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    2. Atreya, Ajita & Ferreira, Susana & Michel-Kerjan, Erwann, 2015. "What drives households to buy flood insurance? New evidence from Georgia," Ecological Economics, Elsevier, vol. 117(C), pages 153-161.

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    More about this item

    Keywords

    NFIP; progressivity; departure from proportionality;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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