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Assessing the Economic Benefits of Flood Defenses: A Repeat‐Sales Approach

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  • Allan Beltrán
  • David Maddison
  • Robert J. R. Elliott

Abstract

In this article we identify the impact of the construction of flood defenses on property prices using a difference‐in‐differences repeat‐sales methodology. Our data set contains information on over 12 million individual property transactions, which is merged with GIS data identifying the spatial location and main characteristics of 1,666 flood defenses built in England between 1995 and 2014. Results suggest that at the finer 6‐digit postcode level the construction of flood defenses raises urban house prices by 12.6% to 16.7%. However, for rural properties at the slightly coarser 5‐digit postcode level the construction of defenses reduces house prices by 0.8% to 5.0%. This suggests that in certain locations the disamenity impact of flood defenses and the perceived threat of redirected flooding outweigh the benefits of reduced flood risk.

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  • Allan Beltrán & David Maddison & Robert J. R. Elliott, 2018. "Assessing the Economic Benefits of Flood Defenses: A Repeat‐Sales Approach," Risk Analysis, John Wiley & Sons, vol. 38(11), pages 2340-2367, November.
    • Handle: RePEc:wly:riskan:v:38:y:2018:i:11:p:2340-2367
    DOI: 10.1111/risa.13136
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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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