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Learning from Extreme Events: Risk Perceptions after the Flood

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  • Carolyn Kousky

Abstract

This paper examines whether a severe flood causes homeowners to update their assessment of flood risk as seen in a change in the price of floodplain property. I use data on all single-family, residential property sales in St. Louis County, Missouri, between 1979 and 2006 in a repeat-sales model and a property fixed-effects model. After the 1993 flood on the Missouri and Mississippi rivers, property prices in 100-year floodplains did not change significantly, but prices in 500-year floodplains declined by between 2% and 5%. All property prices in municipalities located on the rivers fell postflood by 6% to 10%.

Suggested Citation

  • Carolyn Kousky, 2010. "Learning from Extreme Events: Risk Perceptions after the Flood," Land Economics, University of Wisconsin Press, vol. 86(3).
    • Handle: RePEc:uwp:landec:v:86:y:2010:iii:1:p395-422
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    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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