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Flood Risk Perceptions: Accuracy, Determinants, and the Role of Probability Weighting

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  • Dylan Turner
  • Craig E. Landry

Abstract

This study analyzes survey data of U.S. East Coast homeowners to characterize accuracy and determinants of homeowner flood risk (mis)perceptions. Using an array of instruments, we assess subjective risk perceptions and compare them with objective risk estimates. Reduced-form regressions suggest flood experience, worry, and flood zone classification influence relative perceptions of risk. Common probability weighting functions do not fit the divergence in risk perceptions, suggesting that the source of the probability distortions is most likely due to misperceiving the true risk rather than a widespread behavioral heuristic.

Suggested Citation

  • Dylan Turner & Craig E. Landry, 2024. "Flood Risk Perceptions: Accuracy, Determinants, and the Role of Probability Weighting," Land Economics, University of Wisconsin Press, vol. 100(3), pages 478-504.
    • Handle: RePEc:uwp:landec:v:100:y:2024:i:3:p:478-504
    Note: DOI: https://doi.org/10.3368/le.100.3.120722-0101R
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    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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