The Affordability Goal and Prices in the National Flood Insurance Program / Matthew E. Kahn, V. Kerry Smith.

Format:

Book

Author/Creator:

Kahn, Matthew E.

Contributor:

National Bureau of Economic Research.

Smith, V. Kerry.

Series:

Working Paper Series (National Bureau of Economic Research) no. w24120.

NBER working paper series no. w24120

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2017.

Summary:

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.

Notes:

Print version record

December 2017.