TY - JOUR
T1 - Excess vulnerability from subsidized flood insurance
T2 - Housing market adaptation when premiums equal expected flood damage
AU - Colby, Scott J.
AU - Zipp, Katherine Y.
N1 - Funding Information:
The authors would like to thank Lara Fowler, Ryan Baxter, Maurie Kelly, and Kayla Kelly-Slatten from the Pennsylvania State University, L. Donald Duke and Michele Weitzel from Florida Gulf Coast University, and Carolyn Kousky from University of Pennsylvania. This project was sponsored, in part, by a grant from the Center for Rural Pennsylvania, a legislative agency of the Pennsylvania General Assembly and resulted in a report, which can be found here: http://www.rural.palegislature.us/documents/ reports/Flood-Mitigation-2017.pdf. We would also like to acknowledge helpful comments from audience members at the University of Delaware Applied Economics
Funding Information:
seminar series, the Northeastern Agricultural and Resource Economics Association annual meetings, the World Congress of Environmental and Resource Economists, and the University of Georgia Agricultural and Applied Economics seminar series. The work of Katherine Y. Zipp was partially supported by the Department of Agricultural Economics, Sociology, and Education at Penn State, and the USDA National Institute of Food and Agriculture and Multistate Hatch Appropriations under Project # PEN04631 and Accession # 1014400.
Publisher Copyright:
© 2021 World Scientific Publishing Company.
PY - 2021/2
Y1 - 2021/2
N2 - We calculate there are 8.1% more houses in Allegheny County, PA (Pittsburgh) due to flood insurance subsidies. Conversely, if/when National Flood Insurance Program (NFIP) premiums rise by 50% to equal expected damages, property values will decrease by 8.8% in the short-term, with about half of that recuperated in the long run (4.7%) as quality-adjusted housing stocks contract by 7.5% over decades. This analysis informs community planning and current NFIP revisions that strive to balance solvency and social consequences. Furthermore, our extension of Poterba's (1984) dynamic user-cost of housing model can be used in integrated assessment models of climate change adaptation.
AB - We calculate there are 8.1% more houses in Allegheny County, PA (Pittsburgh) due to flood insurance subsidies. Conversely, if/when National Flood Insurance Program (NFIP) premiums rise by 50% to equal expected damages, property values will decrease by 8.8% in the short-term, with about half of that recuperated in the long run (4.7%) as quality-adjusted housing stocks contract by 7.5% over decades. This analysis informs community planning and current NFIP revisions that strive to balance solvency and social consequences. Furthermore, our extension of Poterba's (1984) dynamic user-cost of housing model can be used in integrated assessment models of climate change adaptation.
UR - http://www.scopus.com/inward/record.url?scp=85086780511&partnerID=8YFLogxK
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U2 - 10.1142/S2010007820500128
DO - 10.1142/S2010007820500128
M3 - Article
AN - SCOPUS:85086780511
SN - 2010-0078
VL - 12
JO - Climate Change Economics
JF - Climate Change Economics
IS - 1
M1 - 2050012
ER -
