Finance and Economics Discussion Series (FEDS)
Flood Risk Mapping and the Distributional Impacts of Climate Information
Joakim A. Weill
This paper examines the provision of official flood risk information in the United States and its distributional impacts on residential flood insurance take-up. Assembling all flood maps produced after Hurricane Katrina, I document that updated maps decreased the number of properties zoned in high-risk floodplains and incorrectly omitted five million properties, primarily in neighborhoods with more Black and Hispanic residents. Leveraging the staggered timing of map updates, I estimate they decreased flood insurance take-up and exacerbated racial disparities in insurance coverage. Correcting flood maps could increase welfare by $20 billion annually, but past map updates distorted risk and price signals.
Keywords: Applied Econometrics, Climate Adaptation, Disaster Insurance, Environmental Inequalities, Flood Risk, Information Provision
PDF: Full Paper
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