Assessing the economic benefits of flood defenses: a repeat-sales approach

Research output: Contribution to journalArticle

Colleges, School and Institutes

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 defences 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.

Details

Original languageEnglish
Pages (from-to)2340-2367
Number of pages28
JournalRisk Analysis
Volume38
Issue number11
Early online date6 Aug 2018
Publication statusPublished - Nov 2018

Keywords

  • difference-in-difference, flood defences, flood risk, hedonic price method, house prices, repeat-sales