Weather Shocks, Housing Prices, and Population : the Role of Expectation Revisions

I document empirical regularities of flooding in the US with newly-compiled insured, uninsured, historical loss, and flood zone data at the town level for the decade after 2003. I identify instances with low damage and low risk expectations, implied by the high uninsured share, where experience with or proximity to flooding can raise perceived risk. I examine the causal impact of flood damage on population change and its interaction with the real estate market. I find that risk revisions are important determinant of population change and real estate values. Only growing places with low historic flood loss or those with low-risk flood planes experience population declines. The decline is related to investments in flood risk mitigation which raise cost of living. Elsewhere, higher risk only depreciates house values, causing higher-income households to leave. Floods also have significant spillovers on population and prices in neighbors with no direct damage