Description:
Flood risk is the most pervasive and costly natural hazard globally. With significant increases in flood risk expected over coming decades, future exposure to flood risk and associated costs will depend heavily on how private consumption decisions respond to new information about risk. We exploit a one-off national information treatment in the form of the release in 2011, for the first time, of detailed flood risk maps for Ireland, to test the effect of new information about flood risk on housing prices across an entire national housing market. We combine rich dwelling-level information on over 475,000 dwellings for the period 2006-2015 with detailed official data relating to flood risk, events and defences. Our core finding is that information matters. The price of housing responded dramatically to the release of flood risk maps at the end of 2011, with the emergence of a 4% price discount for dwellings at risk of flooding