Flood Risk, Local Hazard Mitigation, and the Community Rating System of NFIP
49 Pages Posted: 31 Oct 2014 Last revised: 17 Aug 2017
Date Written: August 14, 2017
Using panel data for North Carolina communities, we estimate dynamic regression models of flood mitigation projects as recognized by the Community Ratings System (CRS) of the US National Flood Insurance Program. We find serial correlation in CRS point totals, which we interpret as incremental persistence that likely reflects physical and human capital accumulation. We find greater levels of mitigation in communities with larger tax revenues and lower levels of crime and unemployment and a weak, but significant, effect due to recent flood experience. Separating point levels by sub-series mitigation categories, we find most investments in mitigation relate to mapping and regulation (C400) and damage reduction (C500), which include activities that are accessible to communities and offer much greater point accumulation (relative to other mitigation series (C300 and C600)). Socioeconomic factors also effect hazard mitigation; CRS points are greater in communities with greater median household income and higher population density.
Keywords: flood, insurance, mitigation, community ratings system, dynamic regression
JEL Classification: H44, Q54, Q58
Suggested Citation: Suggested Citation