Adapting to Natural Disasters through Better Information: Evidence from the Home Seller Disclosure Requirement

59 Pages Posted: 11 Nov 2021 Last revised: 14 Nov 2023

See all articles by Seunghoon Lee

Seunghoon Lee

Massachusetts Institute of Technology (MIT)

Date Written: November 08, 2023

Abstract

While flood damage is determined by both flood intensity and population exposure, the US has predominantly focused on managing the former, with limited success. This paper studies whether a Home Seller Disclosure Requirement can reduce flood exposure and thus flood damage. Leveraging two quasi-experimental variations of the policy, I first show that mandating flood risk disclosure lowers the population living in high-risk areas. Further, using a hydrological measure of flood intensity, I find that it reduces the probability of flood damage by 33 percent. These findings illustrate that easing information frictions can promote voluntary adaptation to natural disasters.

Suggested Citation

Lee, Seunghoon, Adapting to Natural Disasters through Better Information: Evidence from the Home Seller Disclosure Requirement (November 08, 2023). MIT Center for Real Estate Research Paper No. 21/17, Available at SSRN: https://ssrn.com/abstract=3960813 or http://dx.doi.org/10.2139/ssrn.3960813

Seunghoon Lee (Contact Author)

Massachusetts Institute of Technology (MIT)

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
281
Abstract Views
1,064
Rank
203,974
PlumX Metrics