Abstract
We compare property price effects from pluvial, fluvial, and groundwater flooding in the urban area of Cologne, Germany. We focus on pluvial flooding as it is becoming increasingly important to urban areas and research on its impact on housing prices is scarce. Using a spatial Durbin model and a spatial Durbin error model, we control for different types of spatial spillovers and find that pluvial flooding is not part of the property pricing process. Fluvial flooding from the Rhine River is more important to property pricing, at least for condominiums, resulting in direct price discounts in higher hazard zones. Groundwater flooding, which occurs with a temporal lag after fluvial flood events, shows only a partial strengthening effect. Our results point to the importance of adequate flood precautions and risk communication, and to an adjustment in flood insurance as property price effects are an important damage category in the flood risk management plans of communities.
Published Version
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