Social learning about climate risk

Abstract

With a social network adjacency matrix constructed from the Facebook Social Connectedness Index (SCI), this paper examines whether social learning facilitates climate risk perception updates to inform climate adaptation. We find that Hurricanes Harvey and Irma‐induced regional flooding increased flood insurance policies nationwide to the extent of each county’s social network proximity to the flooded areas, with a corresponding update in climate risk perception. Social learning resulted in an additional 250,000 policies in flooded counties and 81,000 policies in unflooded counties over 3 years. We find evidence of the salience effect but no support for adverse selection or over‐insurance.

Publication
Economic Inquiry
Click the Slides button above to demo Academic’s Markdown slides feature.

#Supplementary notes can be added here, including code and math.

Sébastien Box-Couillard
Sébastien Box-Couillard
Ph.D. Candidate in Applied Economics

I am a Ph.D. candidate in Agricultural and Consumer Economics at the University of Illinois Urbana-Champaign. My research interests lie at the intersection of environmental and urban economics. I am particularily interested in interactions between inequality, discrimination, housing markets and natural disasters.

Related