Cities and the sea level

Lin, Yatang, McDermott, Thomas K.J. and Michaels, Guy ORCID: 0000-0002-8796-4536 (2024) Cities and the sea level. Journal of Urban Economics. ISSN 0094-1190 (In Press)

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Abstract

Construction on low elevation coastal zones is risky for both residents and taxpayers who bail them out. To investigate this construction, we analyze spatially disaggregated data covering the entire US Atlantic and Gulf coasts. We find that the 1990 housing stock reflects historical avoidance of locations prone to sea level rise (SLR) and flooding, but net new construction from 1990-2010 was similar in SLR-prone locations and safer ones; and within densely built coastal areas, net new construction was higher in SLR-prone locations. These findings are difficult to rationalize as mere products of moral hazard or imperfect information, suggesting that people build on risky locations to benefit from nearby urban agglomerations. To explain our findings, we develop a simple model of a monocentric coastal city, which we use to explore the consequences of sea level rise. This model helps explain cities’ role in expanding flood risks, and how future sea level rise may reshape coastal cities, creating significant challenges for policymakers.

Item Type:	Article
Additional Information:	© 2024
Divisions:	Economics
Subjects:	G Geography. Anthropology. Recreation > G Geography (General) G Geography. Anthropology. Recreation > GE Environmental Sciences
JEL classification:	R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate; Natural Disasters R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R14 - Land Use Patterns
Date Deposited:	05 Jul 2024 08:33
Last Modified:	05 Jul 2024 08:33
URI:	http://eprints.lse.ac.uk/id/eprint/124101

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