Effects of Flood Hazards on Property Values: Evidence Before and After Hurricane Floyd
نویسنده
چکیده
This study uses a hedonic property price function to estimate the effects of flood hazards on residential property values. The study utilizes data from over 8,000 single-family residential home sales in Pitt County, North Carolina between 1992 and 2002. This area experienced significant flooding from Hurricane Floyd in September 1999. Results show that a house located within a floodplain has a lower market value than an equivalent house located outside the floodplain. Furthermore, the price discount from locating within a floodplain is significantly larger after Hurricane Floyd than before. For an average valued house, the price discount for floodplain location is greater than the capitalized flood insurance premiums for sales after Floyd but less than capitalized flood insurance premiums for sales before Floyd. 1 We thank Ralph Forbes of the Pitt County Management Information Systems for helping us acquire and understand floodplain and property sales data and Afua Dei-Tutu for excellent research assistance.
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