NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Affordability Goal and Prices in the National Flood Insurance Program

Matthew E. Kahn, V. Kerry Smith

NBER Working Paper No. 24120
Issued in December 2017
NBER Program(s):Environment and Energy Economics

The United States Gulf Region features areas that face significant flood risk. Climate change may further elevate this risk. Home owners in such areas face potentially large asset losses and property maintenance costs. Anticipating these challenges, the Federal government has enacted a complex set of policies through its National Flood Insurance Program (NFIP). The NFIP offers reduced insurance rates for homes built before rate maps were drawn and grandfathers rates for homes when new maps increase their risk ratings. This paper asks if the goal of affordable NFIP insurance rates for the high risk Gulf Coast areas is warranted? We compare the income distribution of the set of people who live in the areas that face the highest risk of flooding relative to nearby areas. Our findings imply reduced rates for high risk areas cannot be justified based on the assumption that low income households live in these areas.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w24120

Users who downloaded this paper also downloaded* these:
Collier, Schwartz, Kunreuther, and Michel-Kerjan w23579 Risk Preferences in Small and Large Stakes: Evidence from Insurance Contract Decisions
Gendron-Carrier, Gonzalez-Navarro, Polloni, and Turner w24183 Subways and Urban Air Pollution
Jack, Jayachandran, and Rao w24192 Environmental Externalities and Free-riding in the Household
Valletta w22935 Recent Flattening in the Higher Education Wage Premium: Polarization, Skill Downgrading, or Both?
Lade and Rudik w24139 Costs of Inefficient Regulation: Evidence from the Bakken
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us