Role of Post-Disaster Federal Payouts on Flood Insurance in the US
Publication: ASCE Inspire 2023
ABSTRACT
Economists found that post-disaster assistance programs often reduce the demand for flood insurance. This crowding-out effect, also called “charity hazard,” is relatively underexplored in the US. To bridge that gap, this paper presents a causal model that analyzes the impact of post-disaster federal payouts on flood insurance enrollment using historical data from 1,158 US counties between 2016 and 2020 with positive flood damage where a major flood-related disaster had been declared. To develop the causal model, this paper utilizes the propensity score matching method to assess the impact of receiving federal payout in a county in a year on the percentage change in the number of flood insurance policies and the total insured value of the flood insurance policies in the subsequent year. It was found that the availability of the federal payout in a county in a year increased the number of flood insurance policies by 5.2% and the total insured value of those policies by 4.6% in the following year.
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Published In
ASCE Inspire 2023
Pages: 623 - 630
History
Published online: Nov 14, 2023
ASCE Technical Topics:
- Business management
- Data analysis
- Disaster risk management
- Disasters and hazards
- Engineering fundamentals
- Federal government
- Floods
- Government
- Historic buildings
- History and Heritage
- Hydrologic data
- Hydrologic engineering
- Hydrology
- Insurance
- Methodology (by type)
- Mitigation and remediation
- Natural disasters
- Organizations
- Practice and Profession
- Public administration
- Public policy
- Research methods (by type)
- Water and water resources
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