Flood Risk,Flood Mitigation,and Location Choice: Evaluating the National Flood Insurance Program's Community Rating System

Climate change is expected to worsen the negative effects of natural disasters like floods. The negative impacts, however, can be mitigated by individuals’ adjustments through migration and relocation behaviors. Previous literature has identified flood risk as one significant driver in relocation decisions, but no prior study examines the effect of the National Flood Insurance Program's voluntary program—the Community Rating System (CRS)—on residential location choice. This article fills this gap and tests the hypothesis that flood risk and the CRS‐creditable flood control activities affect residential location choices. We employ a two‐stage sorting model to empirically estimate the effects. In the first stage, individuals’ risk perception and preference heterogeneity for the CRS activities are considered, while mean effects of flood risk and the CRS activities are estimated in the second stage. We then estimate heterogeneous marginal willingness to pay (WTP) for the CRS activities by category. Results show that age, ethnicity and race, educational attainment, and prior exposure to risk explain risk perception. We find significant values for the CRS‐creditable mitigation activities, which provides empirical evidence for the benefits associated with the program. The marginal WTP for an additional credit point earned for public information activities, including hazard disclosure, is found to be the highest. Results also suggest that water amenities dominate flood risk. Thus, high amenity values may increase exposure to flood risk, and flood mitigation projects should be strategized in coastal regions accordingly.     

Does federal flood hazard mitigation assistance affect community rating system participation?

With the inexorable march of climate change, increased flooding is inevitable. Understanding the feedback between federal flood mitigation policies and the ways in which local governments build flood resilience is a significant gap in the literature. In particular, the effect that federal flood mitigation grants have on the intensity of local flood mitigation is nonexistent. This work measures flood risk mitigation by using the level of participation in FEMA's Community Rating System (CRS). Communities that participate in the CRS and undertake mitigation are awarded points; more points imply a higher level of participation. Since its inception in 1990, CRS communities have received considerably more federal pre-disaster flood mitigation grants compared to non-CRS communities. This study assesses the effect of federal pre-disaster flood mitigation grants on the level of participation in the CRS program. We use data on Hazard Mitigation Assistance programs and CRS participation data between 2010 and 2015. We link these data to flood risk and socioeconomic information. Our results indicate (i) federal pre-disaster flood mitigation grants do not appear to significantly influence the level of CRS participation, (ii) the effect of flood risk and socioeconomic factors on the level of CRS participation are mixed, and (iii) the current level of CRS participation is influenced by the previous level of CRS participation, which is not tied to federal pre-disaster flood mitigation grant. These findings add to the growing discussions on the drivers and barriers of local flood risk mitigation.     

Policy Learning for Flood Mitigation: A Longitudinal Assessment of the Community Rating System in Florida

Floods continue to inflict the most damage upon human communities among all natural hazards in the United States. Because localized flooding tends to be spatially repetitive over time, local decisionmakers often have an opportunity to learn from previous events and make proactive policy adjustments to reduce the adverse effects of a subsequent storm. Despite the importance of understanding the degree to which local jurisdictions learn from flood risks and under what circumstances, little if any empirical, longitudinal research has been conducted along these lines. This article addresses the research gap by examining the change in local flood mitigation policies in Florida from 1999 to 2005. We track 18 different mitigation activities organized into four series of activities under the Federal Emergency Management Agency's (FEMA) Community Rating System (CRS) for every local jurisdiction in Florida participating in the FEMA program on a yearly time step. We then identify the major factors contributing to policy changes based on CRS scores over the seven-year study period. Using multivariate statistical models to analyze both natural and social science data, we isolate the effects of several variables categorized into the following groups: hydrologic conditions, flood disaster history, socioeconomic and human capital controls. Results indicate that local jurisdictions do in fact learn from histories of flood risk and this process is expedited under specific conditions.     

The Impact on Inequality of Raising the Minimum Wage: Gap‐narrowing and Reranking Effects

Raising the minimum wage may reduce inequality by increasing the wages of low‐skill workers, but it may also increase inequality due to negative impacts on employment that produce wage losses. Using previous estimates of the elasticities of wages and employment to changes in the minimum wage in Colombia and Brazil, we show that the net impact on inequality of increasing the minimum wage may depend on the distributional weights used for inequality measurement. The results are obtained by decomposing the Gini index into reranking and gap‐narrowing effects. Inequality‐increasing reranking effects, which are associated with job losses, may dominate inequality‐decreasing gap‐narrowing effects, which are associated with wage gains, when high weights are placed on workers with low earnings. For standard distributional weights, however, the likely net impact is a reduction in wage inequality.     

Microsimulating the Evolution of Italian Pension Benefits: the Role of Retirement Choices and Lowest Pensions Indexing

A few years after the introduction of the Amato and Dini laws, a renewed debate on reforming the Italian pension system and on modifying its structure and technical parameters is taking place. The present work simulates individual reactions to systemic changes, distinguishing among the different typologies of workers the categories of dependent (private and public) and self‐employed ones. This approach allows us to perform a general micro‐analysis of the effects of past reforms on family pension income distribution and average individual pension benefits. Furthermore, it makes it possible to assess the consequences of legislator's choices such as the indexation of the lowest pensions (‘assegni sociali’ and ‘pensioni integrate al minimo’) to wages or to inflation. Finally, a Monte Carlo analysis projects future inequality and poverty trends with a remarkable accuracy and allows to verify the robustness of our results.     

Examining the 100‐Year Floodplain as a Metric of Risk,Loss, and Household Adjustment

An understudied, but central aspect in understanding flood impacts is the way we conceptualize, identify, and delineate risk. The 100‐year floodplain is the longstanding metric in the United States for determining and acting upon the possibility of an area being inundated. This spatial delineation guides local planning and development decisions, triggers insurance purchases and other household adjustments, and serves as the fundamental indicator for whether it is safe to build a structure on a particular site. However, increasing evidence suggests that the 100‐year floodplain is neither accurate nor sufficient in guiding communities and household decisions to mitigate the adverse economic impacts of floods. In this perspective, we examine the effectiveness of the 100‐year floodplain as an appropriate marker of risk. First, we review existing studies on location and flood damage. Next, we apply these concepts to repetitive flood losses data in Harris County, Texas. We conclude that the apparent inability of the floodplain designation to effectively capture the likelihood of property damage and potential loss of human life in coastal areas has left potentially millions of property owners unaware of the flood risk and unprepared to mitigate their adverse impacts. Relying on traditional 100‐year floodplain boundaries, local decision makers are hampered in their ability to ensure community development occurs in a resilient manner. Finally, we set forth an agenda for future research to better capture the conditions associated with flood risk and account for the large percentage of damage outside the designated floodplain.     

贫困减少与经济增长和收入不平等的关系研究——基于时序数据

基于时间序列分析方法,以1981年～2004年贫困发生率、基尼系数和农村人均纯收入等相关指标,从时序雏度考察贫困人口的变动与经济增长和收入不平等的长期均衡关系和相互作用机制.Johansen协整检验结果表明,3个变量之间存在着一定的长期协整性:格兰杰因果检验发现,农村人均纯收入和基尼系数能够预测贫困发生率的变化,反之不能成立;误差修正模型显示,贫困发生率对农村人均纯收入的弹性系数为正,对基尼系数的弹性系数为负.且前者大于后者.由此认为,农村人均纯收入的提高是促进贫困减少的影响因素,收入不平等在一定程度上阻碍了贫困减少,经济增长对贫困减少的积极效应大于收入不平等对贫困减少的消极效应.因此,在目前中国经济增长时期,确保农民收入大幅度增加、努力缓解收入差距是贫困减少的有效途径.     

A Duration‐sensitive Measure of the Unemployment Rate: Theory and Application

The measurement of unemployment, like that of poverty, involves two distinct steps: identification and aggregation. In this two‐step process, the issue of identifying the unemployed has received considerable attention but, once the unemployed have been identified, the aggregation issue has been addressed by simply ‘counting heads’: the unemployment rate is conventionally defined as the proportion of the labour force that, on a given date, is unemployed. This, in particular, leads to differences between individuals, in their unemployment experiences being ignored when the unemployment rate is being computed. This paper — predicated on the proposition that what matters to a person is not just the fact of unemployment but also its duration — proposes a methodology, derived from the measurement of income inequality, for adjusting unemployment rates so as to make them ‘duration‐sensitive’. In consequence, different values of the ‘duration‐sensitive’ rate will, depending upon the degree of inequality in the distribution of unemployment duration, and upon the extent to which society is averse to such inequality, be associated with the same value of the conventionally defined unemployment rate. A numerical example, based on published data for seven major OECD counties, illustrates the methodology.     

Efficiency in the generation of social welfare in Mexico: A proposal in the presence of bad outputs

One of the main goals of any country is to secure the general welfare of society, entailing positive levels of education, health and income, coupled with low levels of social inequality. The following paper studies the efficient use of economic and social resources to generate social welfare in the presence of bad outputs in the states of Mexico during 2010. A two-level data envelopment analysis model was used to determine how efficient the 32 states of the Mexican Republic were, considering as model variables the socioeconomic indicators of the three dimensions of human development (education, health and income), and the data on poverty or inequity in the country. The analysis of the results reveals that only 5 of the 32 units studied were efficient in generating welfare and in reducing poverty, while the rest need to increase their welfare levels and especially reduce inequity in education and income using the economic and social resources they possess.     

Socioeconomic Vulnerability and Adaptation to Environmental Risk: A Case Study of Climate Change and Flooding in Bangladesh

In this article we investigate the complex relationship between environmental risk, poverty, and vulnerability in a case study carried out in one of the poorest and most flood-prone countries in the world, focusing on household and community vulnerability and adaptive coping mechanisms. Based upon the steadily growing amount of literature in this field we develop and test our own analytical model. In a large-scale household survey carried out in southeast Bangladesh, we ask almost 700 floodplain residents living without any flood protection along the River Meghna about their flood risk exposure, flood problems, flood damage, and coping mechanisms. Novel in our study is the explicit testing of the effectiveness of adaptive coping strategies to reduce flood damage costs. We show that, households with lower income and less access to productive natural assets face higher exposure to risk of flooding. Disparity in income and asset distribution at community level furthermore tends to be higher at higher risk exposure levels, implying that individually vulnerable households are also collectively more vulnerable. Regarding the identification of coping mechanisms to deal with flood events, we look at both the ex ante household level preparedness for flood events and the ex post availability of community-level support and disaster relief. We find somewhat paradoxically that the people that face the highest risk of flooding are the least well prepared, both in terms of household-level ex ante preparedness and community-level ex post flood relief.     

Unions and Income Inequality: A Heterogeneous Panel Co‐integration and Causality Analysis

Although a large body of research has examined the effects of unions on the wage distribution, surprisingly little attention has been devoted to the effects of unions on the distribution of income. This paper examines the long‐run relationship between unionization and income inequality for a sample of 20 countries. Using heterogeneous panel co‐integration and causality techniques, we find that (i) unions have, on average, a negative long‐run effect on income inequality, (ii) there is considerable heterogeneity in the effects of unionization on income inequality across countries (in 40 per cent of the cases the effect is positive) and (iii) long‐run causality runs in both directions, suggesting that, on average, an increase in unionization reduces income inequality and that, in turn, higher inequality leads to lower unionization rates.     

Assessment of ductile dike behavior as a novel flood risk reduction measure

Dikes are an effective flood risk reduction measure in deltaic areas. Present risk analyses consist often of decoupled calculations of probabilities of dike failure and calculation of consequences of flooding given dike failure. However, the flood defense design determines not only the probability of failure, but influences the consequences of flooding as well. Especially when the dike has a ductile failure and breach growth behavior, due to a structural robust design, the consequences of flooding reduce. In this article, we present a novel assessment of risks and investments, valuing structural robustness of a construction type, represented by its ductile behavior during high loads. Therefore, the consecutive occurrence of initial dike failure mechanisms, failure path development, breach growth, and consequences is modeled integral and time-dependent. The investments consist of the costs to reinforce or reconstruct the flood defense to behave relatively ductile. This integral assessment enables to compare flood impacts of different construction types and different dimensions of designs. We applied it on a case in a riverine area in the Netherlands. The results show that the total societal costs and the individual risks on victims are very dependent on the construction type. The risk profile of a polder protected by a brittle or a ductile dike differs significantly. The brittle sand dike in the case requires larger dimensions than the more ductile dike with a clay core.     

Ecological Information Needs for Environmental Justice

The concept that all peoples should have their voices heard on matters that affect their well‐being is at the core of environmental justice (EJ). The inability of some people of small towns, rural areas, minority, and low‐income communities, to become involved in environmental decisions is sometimes due to a lack of information. We provide a template for the ecological information that is essential to examine environmental risks to EJ populations within average communities, using case studies from South Carolina (Savannah River, a DOE site with minority impacts), Washington (Hanford, a DOE site with Native American impacts), and New Jersey (nonpoint, urbanized community pollution). While the basic ecological and public health information needs for risk evaluations and assessments are well described, less attention has been focused on standardizing information about EJ communities or EJ populations within larger communities. We suggest that information needed about EJ communities and populations includes demographics, consumptive and nonconsumptive uses of their regional environment (for example, maintenance and cosmetic, medicinal/religious/cultural uses), eco‐dependency webs, and eco‐cultural attributes. A purely demographics approach might not even identify EJ populations or neighborhoods, much less their spatial relation to the impact source or to each other. Using information from three case studies, we illustrate that some information is readily available (e.g., consumption rates for standard items such as fish), but there is less information about medicinal, cultural, religious, eco‐cultural dependency webs, and eco‐cultural attributes, all of which depend in some way on intact, functioning, and healthy ecosystems.     

Are We Adapting to Floods? Evidence from Global Flooding Fatalities

There has been a growing interest in understanding whether and how people adapt to extreme weather events in a changing climate. This article presents one of the first empirical analyses of adaptation to flooding on a global scale. Using a sample of 97 countries between 1985 and 2010, we investigate the extent and pattern of flood adaptation by estimating the effects of a country's climatological risk, recent flood experiences, and socioeconomic characteristics on its flood‐related fatalities. Our results provide mixed evidence on adaptation: countries facing greater long‐term climatological flooding risks do not necessarily adapt better and suffer fewer fatalities; however, after controlling for the cross‐country heterogeneity, we find that more recent flooding shocks have a significant and negative effect on fatalities from subsequent floods. These findings may suggest the short‐term learning dynamics of adaptation and potential inefficacy of earlier flood control measures, particularly those that promote increased exposure in floodplains. Our findings provide important implications for climate adaptation policy making and climate modeling.     

Total Economic Consequences of an Influenza Outbreak in the United States

Pandemic influenza represents a serious threat not only to the population of the United States, but also to its economy. In this study, we analyze the total economic consequences of potential influenza outbreaks in the United States for four cases based on the distinctions between disease severity and the presence/absence of vaccinations. The analysis is based on data and parameters on influenza obtained from the Centers for Disease Control and the general literature. A state‐of‐the‐art economic impact modeling approach, computable general equilibrium, is applied to analyze a wide range of potential impacts stemming from the outbreaks. This study examines the economic impacts from changes in medical expenditures and workforce participation, and also takes into consideration different types of avoidance behavior and resilience actions not previously fully studied. Our results indicate that, in the absence of avoidance and resilience effects, a pandemic influenza outbreak could result in a loss in U.S. GDP of $25.4 billion, but that vaccination could reduce the losses to $19.9 billion. When behavioral and resilience factors are taken into account, a pandemic influenza outbreak could result in GDP losses of $45.3 billion without vaccination and $34.4 billion with vaccination. These results indicate the importance of including a broader set of causal factors to achieve more accurate estimates of the total economic impacts of not just pandemic influenza but biothreats in general. The results also highlight a number of actionable items that government policymakers and public health officials can use to help reduce potential economic losses from the outbreaks.     

Asteroid Risk Assessment: A Probabilistic Approach

Following the 2013 Chelyabinsk event, the risks posed by asteroids attracted renewed interest, from both the scientific and policy‐making communities. It reminded the world that impacts from near‐Earth objects (NEOs), while rare, have the potential to cause great damage to cities and populations. Point estimates of the risk (such as mean numbers of casualties) have been proposed, but because of the low‐probability, high‐consequence nature of asteroid impacts, these averages provide limited actionable information. While more work is needed to further refine its input distributions (e.g., NEO diameters), the probabilistic model presented in this article allows a more complete evaluation of the risk of NEO impacts because the results are distributions that cover the range of potential casualties. This model is based on a modularized simulation that uses probabilistic inputs to estimate probabilistic risk metrics, including those of rare asteroid impacts. Illustrative results of this analysis are presented for a period of 100 years. As part of this demonstration, we assess the effectiveness of civil defense measures in mitigating the risk of human casualties. We find that they are likely to be beneficial but not a panacea. We also compute the probability—but not the consequences—of an impact with global effects (“cataclysm”). We conclude that there is a continued need for NEO observation, and for analyses of the feasibility and risk‐reduction effectiveness of space missions designed to deflect or destroy asteroids that threaten the Earth.     

PREFERENCES FOR REDISTRIBUTION AND PERCEPTION OF FAIRNESS: AN EXPERIMENTAL STUDY

We conduct a laboratory experiment to study how demand for redistribution of income depends on self‐interest, insurance motives, and social concerns relating to inequality and efficiency. Our choice environments feature large groups of subjects and real‐world framing, and differ with respect to the source of inequality (earned or arbitrary), the cost of taxation to the decision maker, the dead‐weight loss of taxation, uncertainty about own pretax income, and whether the decision maker is affected by redistribution. We estimate utility weights for the different sources of demand for redistribution, with the potential to inform modeling in macroeconomics and political economy     

Altruism in Networks

We provide the first analysis of altruism in networks. Agents are embedded in a fixed network and care about the well‐being of their network neighbors. Depending on incomes, they may provide financial support to their poorer friends. We study the Nash equilibria of the resulting game of transfers. We show that equilibria maximize a concave potential function. We establish existence, uniqueness of equilibrium consumption, and generic uniqueness of equilibrium transfers. We characterize the geometry of the network of transfers and highlight the key role played by transfer intermediaries. We then study comparative statics. A positive income shock to an individual benefits all. For small changes in incomes, agents in a component of the network of transfers act as if they were organized in an income‐pooling community. A decrease in income inequality or expansion of the altruism network may increase consumption inequality.     

Maximizing Health Benefits and Minimizing Inequality: Incorporating Local‐Scale Data in the Design and Evaluation of Air Quality Policies

The U.S. Environmental Protection Agency undertook a case study in the Detroit metropolitan area to test the viability of a new multipollutant risk‐based (MP/RB) approach to air quality management, informed by spatially resolved air quality, population, and baseline health data. The case study demonstrated that the MP/RB approach approximately doubled the human health benefits achieved by the traditional approach while increasing cost less than 20%—moving closer to the objective of Executive Order 12866 to maximize net benefits. Less well understood is how the distribution of health benefits from the MP/RB and traditional strategies affect the existing inequalities in air‐pollution‐related risks in Detroit. In this article, we identify Detroit populations that may be both most susceptible to air pollution health impacts (based on local‐scale baseline health data) and most vulnerable to air pollution (based on fine‐scale PM_2.5 air quality modeling and socioeconomic characteristics). Using these susceptible/vulnerable subpopulation profiles, we assess the relative impacts of each control strategy on risk inequality, applying the Atkinson Index (AI) to quantify health risk inequality at baseline and with either risk management approach. We find that the MP/RB approach delivers greater air quality improvements among these subpopulations while also generating substantial benefits among lower‐risk populations. Applying the AI, we confirm that the MP/RB strategy yields less PM_2.5 mortality and asthma hospitalization risk inequality than the traditional approach. We demonstrate the value of this approach to policymakers as they develop cost‐effective air quality management plans that maximize risk reduction while minimizing health inequality.