Flood Protection and Endogenous Sorting of Households: the role of credit constraints

T.G. Husby, H.L.F. de Groot, M. Hofkes, T. Filatova

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

Human migration is increasingly seen as a promising climate change adaptation and flood risk reduction strategy. The purpose of this paper is to investigate how spatial differences in flood risk, due to differences in flood protection, reduce the mobility of vulnerable households through a credit constraint mechanism. Using an equilibrium model with two households types and endogenous sorting, we show how spatial differences in flood protection lead to clustering of vulnerable households in a risky region, in a real-world setting of common United States (US) flood zones. We find clustering effects of some size for flood zones with return periods of less than 30 years.
Original languageEnglish
Pages (from-to)147-168
Number of pages22
JournalMitigation and Adaptation Strategies for Global Change
Volume23
Issue number2
DOIs
Publication statusPublished - 1 Feb 2018

Funding

We would like to thank the participants of the EAERE Belpasso Summer School 2013 for their comments on an earlier version of this paper. Financial support from Kennis Voor Klimaat and from the Netherlands Organisation for Scientific Research (NWO) VENI Grant 451-11-033 is gratefully acknowledged.

FundersFunder number
Kennis Voor Klimaat
Nederlandse Organisatie voor Wetenschappelijk Onderzoek451-11-033

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