Conference Agenda

Do home prices incorporate flood risk in the immediate aftermath of specific flood events, or is it the repeated exposure over the years that plays a more significant role? We address this question through the first systematic study of the Italian housing market, which is an ideal case study because it is highly exposed to floods, though unevenly distributed across the national territory. Using a novel dataset containing about 550,000 mortgage-financed transactions between 2016 and 2024, as well as hedonic regressions and a difference-in- difference design, we find that: (i) specific floods do not decrease home prices in areas at risk; (ii) the repeated exposure to floods in flood-prone areas leads to a price decline, up to 4% in the most frequently flooded regions; (iii) responses are heterogeneous by buyers’ income and age. Young buyers (with limited exposure to prior floods) do not obtain any price reduction for settling in risky areas, while experienced buyers do. At the same time, buyers who settle in risky areas have lower incomes than buyers in safe areas in the most affected regions. Our results emphasize the importance of cultural and institutional factors in understanding how flood risk affects the housing market and socioeconomic outcomes.

Floods have large societal impacts worldwide, causing both tangible and intangible damage resulting in loss of subjective wellbeing. The adaptive behavior of households can play an important role in minimizing these damages. To understand these dynamics, this study examines the effect of floods on life satisfaction and explores how flood adaptation can mitigate the negative impacts of floods on life satisfaction. Data was collected following the 2021 summer floods in the south of the Netherlands from approximately 1,500 Dutch households who lived in flooded areas or faced the threat of the flood. The results reveal a negative effect of flood experiences on life satisfaction. Implementing structural adaptation measures was found to moderate this relationship. When structural measures are implemented, the negative impact of flood damage on life satisfaction is partially mitigated. In addition, we observe a drop in life satisfaction for low-income individuals who were not reimbursed for flood damages. These findings highlight the potential of flood adaptation in mitigating the loss of subjective wellbeing during a flood event and enhancing post-flood recovery.

Flooding is one of the most damaging natural disasters worldwide, disproportionately affecting vulnerable communities. Climate change is expected to increase the frequency and intensity of flooding, necessitating effective adaptation across all levels of society. While higher expected flood damages call for stronger household adaptation, limited access to information and lacking resources may prevent optimal decisions. Despite advances in flood mapping and research on household adaptation, the link between expected damages and adaptation decisions remains unknown. Here, we study the relationship between household adaptation measures and flood

exposure in the Netherlands – a “best case scenario” due to its accurate flood risk information and recent flood experiences. Using publicly available flood maps, a national hydraulic model, and a large-scale survey, we reveal a significant mismatch between private adaptation measures and objective flood risks. Expected damages could be reduced substantially if high-risk households invested more in adaptation relative to low-risk households. We also uncover high spatial heterogeneity in both flood risk and adaptation, posing challenges to identify vulnerable areas and support adaptation efforts. These findings provide critical insights into the effectiveness of household adaptation, which holds important implications for public adaptation and policy design.

Flood risk is a highly pervasive and costly natural hazard globally. With significant increases in flood risk expected over coming decades, future exposure to flood risk and associated costs will depend heavily on how pri- vate consumption decisions respond to new information about risk. We exploit a one-off national information treatment in the form of the release in 2011, for the first time, of detailed flood risk maps for Ireland, to test the effect of new information about flood risk on housing prices across a na- tional housing market. We combine rich dwelling-level information on over 475,000 dwellings for the period 2006-2015 with detailed official data relating to flood risk, events and defences. Our core finding is that infor- mation matters. The price of housing responded clearly to the release of flood risk maps at the end of 2011, with the emergence of a 4% price dis- count for dwellings at risk of flooding.

While the literature on firms is plentiful, little is known about their distribution across space and how the spatial equilibrium of firms changes in response to climate shocks. In this paper, we provide a unique account of the spatial distribution of corporate organisations in the UK, and analyse how firms' location choices are affected by floods and agglomeration economies. We combine various data sources to obtain a panel of business premises at the geo-coordinates level overlayed with flood maps and firm ownership structure. This allows us to first shed light on the spatial organisational structure of firms within the UK, a topic never studied before. We then investigate the effect of floods on firms' location and find three main results. Firstly, business premises affected by a flood are more likely to relocate after being flooded. This effect decreases with the number of floods, a sign of location-stickiness arising from financial constraints or adaptation. Secondly, organisations owning flooded premises internalise the risk of flooding when making subsequent location decisions and relocate to safer areas. Thirdly, we find that agglomeration economies drive the patterns of business location. Agglomeration economies increase location-stickiness, with organisations being less likely to move when flooded in regions that have higher employment, turnover or business density. But once the firm decides to relocate, conversely, they are more likely to move to regions with higher aggregate productivity. Taken together, these results show that climate change affects the spatial equilibrium of firms, which is important to understand when designing policies.

It is long known that extreme weather becomes more prevalent with climate change and that household adaptation is an important mechanism to reduce damages thereof. However, cold stress events in the global north are often overlooked in this regard. I use a recent cold spell in Texas to analyze household adaptation behavior to extreme weather-induced electricity blackouts. In particular, I study (1) the extent to which households uptook adaptation measures, (2) if treatment spillovers occured. I employ an event study design to analyze the time-varying treatment effect of a simultaneous, one-off dosage treatment. The treatment is defined as exposure to the blackouts during the freeze event. As measure of adaptation I collected a novel type of granular data on installation permits for home electricity generators and rooftop-solar-battery-systems. I find a significant, robust, and time-varying response post-treatment both for home electricity generators and solar-battery-systems that peaks in quarter 3 after treatment. At this peak, the treatment effect of a 10 percentage point increase in outages constitutes 16.4 (8) additional, quarterly permits for generators (solar-battery-systems) per 10,000 households. Google Search data suggests that the public made a systematic association of the 2021 freeze event with climate change, which was not the case in earlier freeze events, and which were also not followed by a post-treatment response. This suggests that the recent response can indeed be interpreted as an adaptive response related to climate change impacts. I further find significant treatment spillovers, which are better explained by social connectedness than by distance, highlighting the role of salience. A heterogeneity analysis by socio-economic characteristics is in process.

The objective of this study is to explore how prices and climate change affect farmers’ land use allocation

decisions. We first develop a structural framework of multi-output production technology

with land as a fixed allocatable input, where farmers optimize their land use according to observed

climate patterns and prices. Enriched with a consistent empirical identification strategy, our

framework is then applied to French crop farms to measure adaptive responses to long-run climate

change and prices. Findings indicate that both prices and climate change substantially influence

farmers’ crop land use decisions. Increasing past temperatures are found to decrease the farm land

share allocated to spring cereals and oil crops. As it implies farmers to grow crops that are less

commonly grown (e.g., protein and root crops), climate change may lead to a diversification of

crop production.