Improving Understanding of Flood Risk: the Effects of Lowering the Cost of Accessing Flood Risk Information

We provide evidence that lowering the cost of accessing flood risk information increases public understanding of the risk of flood events. We exploit a pair of events to generate this conclusion: in July 2008, the Brisbane City Council released property level flood risk reports online, and, in 2011, Brisbane suffered a flood event. Using a longitudinal property sales database and a difference in difference estimator, we refute existing results by finding that prices for at-risk properties fell by 2.5% after the release online of the flood-risk information. Second, after the flood event there was no change in value for at-risk properties that were not flooded in the 2011 event. This suggests that the flood event provided no new information about these properties, and therefore provides evidence that the flood-risk information had already been incorporated into property prices. We also investigate how the details of provided information matter. Specifically, we show that while different flood zones influence property prices, the height of expected floods does not.