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Forgetting the Flood?: An Analysis of the Flood Risk Discount over Time

Forgetting the Flood?: An Analysis of the Flood Risk Discount over Time We examine whether property price differentials reflecting flood risk increase following a large flood event, and whether this change is temporary or permanent. We use single-family residential property sales in Dougherty County, Georgia, between 1985 and 2004 in a difference-in-differences spatial hedonic model framework. After the 1994 “flood of the century,” prices of properties in the 100-year floodplain fell significantly. This effect was, however, short-lived. In spatial hedonic models that explicitly incorporate both linear and nonlinear temporal flood-zone effects, we show that the flood risk discount disappeared between four and nine years after the flood, depending upon the specification. (<i>JEL Q51, Q54</i>) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Land Economics University of Wisconsin Press

Forgetting the Flood?: An Analysis of the Flood Risk Discount over Time

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Publisher
University of Wisconsin Press
Copyright
Copyright by the Board of Regents of the University of Wisconsin System.
ISSN
1543-8325

Abstract

We examine whether property price differentials reflecting flood risk increase following a large flood event, and whether this change is temporary or permanent. We use single-family residential property sales in Dougherty County, Georgia, between 1985 and 2004 in a difference-in-differences spatial hedonic model framework. After the 1994 “flood of the century,” prices of properties in the 100-year floodplain fell significantly. This effect was, however, short-lived. In spatial hedonic models that explicitly incorporate both linear and nonlinear temporal flood-zone effects, we show that the flood risk discount disappeared between four and nine years after the flood, depending upon the specification. (<i>JEL Q51, Q54</i>)

Journal

Land EconomicsUniversity of Wisconsin Press

Published: Oct 16, 2013

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