Abstract

With forecasted increases in heavy precipitation and associated flooding, there is a need to understand the economic impacts of flood events. Even if there is sizable research on the impacts of coastal floods, we cannot directly extrapolate these findings to inland flooding given different amenities and type of residents. To date, analysis of the economic impacts of inland flooding at large temporal and spatial scales has been limited by the scarcity of flood damage metrics uncorrelated with socioeconomic characteristics of affected places. We combine data from flood duration, extent, and depth derived from NOAA's National Water Model with the near-universe of flood insurance claims and policies, data on mortgage applications, and residents' socioeconomic characteristics to derive three main findings of the economic impacts of inland flooding. First, flood duration is an relevant predictor of flood damage. Characterizing floods based purely on spatial characteristics will likely paint an incomplete picture of inland flooding damage. Second, inland flood events have a sizable effect on housing markets, notably, census tracts that experience flooding see a decrease in house prices and a decrease in loan-to-income ratios in mortgage applications. Third, conditional on flood characteristics and number of existing policies, census tracts with higher shares of Black and lower-income populations have a lower number of flood insurance claims. Unequal protection from insurance can exacerbate post-flood inequality. Our findings highlight the economic relevance of flooding impacts away from coastal areas.