Racial Gaps in Federal Flood Buyout Compensations
AEA Papers and Proceedings
vol. 113,
May 2023
(pp. 451-55)
Abstract
In a managed retreat, or "buyout," program, homeowners are offered their property's fair-market value to relocate from a flood-prone area. Using a nationwide sample of federal buyout acquisitions and the universe of US housing transactions over the last two decades, we estimate whether the discount in buyout price compensation, calculated using a hedonic prediction model, depends on a homeowner's race. We provide the first systematic evidence of inequitable compensation in a federal buyout program using nationwide administrative data. Disproportionate compensation, in an attempt to adapt to a warming climate, may further widen the wealth and social mobility gaps.Citation
Jowers, Kay, Lala Ma, and Christopher D. Timmins. 2023. "Racial Gaps in Federal Flood Buyout Compensations." AEA Papers and Proceedings, 113: 451-55. DOI: 10.1257/pandp.20231131Additional Materials
JEL Classification
- D31 Personal Income, Wealth, and Their Distributions
- D63 Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
- Q54 Climate; Natural Disasters and Their Management; Global Warming
- Q58 Environmental Economics: Government Policy
- R38 Production Analysis and Firm Location: Government Policy