Analysis of Spatial Variation in Flood Risk Perception

We use hedonic property models to estimate the spatial variation in flood risk in the city of Albany, GA. In addition to knowing whether a property is in the floodplain, we have a unique dataset with actual inundation maps from tropical storm Alberto that hit Albany in 1994. In the absence of information on the structural damages caused by a flood, having information on the actual inundated area can be useful to tease out information effect of a new flood from potential reconstruction cost. We find that the discount in actually inundated properties is larger which supports our hypothesis that homeowners respond better to what they have visualized (“seeing is believing”) and also the potential reconstruction cost in addition to information effect is capitalized in property prices.Flood Risk, Inundation, Spatial, Discount, Environmental Economics and Policy, Land Economics/Use, Q, R,

Effect of Corn and Soybean meal price on profitability of Control Vs Low Excretion Diets of Finishing Pigs

Scope and Method of Study: The market pig industry has in some ways been a victim of its own success. As animal density is increasing, so are concerns regarding air and water quality, occupational health, and waste management. Many researchers including those at OSU have begun to investigate dietary supplements with synthetic amino acids and phytase that more closely match the dietary needs of the pigs, reducing the total nitrogen and phosphorus excreted. In the same time producers are facing increase in corn and soybean meal prices. So this research is conducted to see the effects of increased feed cost on two major diets, control diet which is a traditional diet and low excretion diet which is a diet that helps reduce Nitrogen and Phosphorus excreted from excreta of market pigs. Simple budgeting procedure and Economic Simulation model (SIMETAR) was used to investigate the effect of future corn and soybean meal price on profitability of control and low excretion diet of market pigs. Findings and Conclusions: The literatures showed that the total gains could be maintained with either of the diets. With increase in corn prices, the total cost of feeding market pigs was found to be higher for control diet as compared to lower excretion diet. Looking at the soybean meal prices at different levels it was found that the cost of feeding market pigs with the lower excretion diet was less as compared to control diet. Therefore, it was concluded that with increase in price of corn and soybean meal the low excretion diet will still be less costly than the control diet. Alternatively, if corn prices decreases then the low excretion diet will be much less costly than the control diet.Department of Agricultural Economic

What Drives Households to Buy Flood Insurance? Evidence from Georgia

Benefiting from access to detailed data on the federally run National Flood Insurance Program for the entire state of Georgia, USA, we analyze residential flood insurance purchasing behavior in that state over more than three decades (1978–2010). The demand for flood insurance on an extensive margin, based on take-up rates, is found to be relatively price inelastic. Aligned with the behavioral economics literature, recent flood events temporarily increase purchases, but this effect fades after 3 years. We also find that the proportion of developed area in floodplains has a significant positive impact on insurance take-up rates. Contrary to what is often assumed, we do not find evidence that insurance purchase and mitigation efforts are substitutes. Educated individuals, individuals over the age of 45, and African-Americans are, all else equal, more likely to purchase flood insurance

Effect of Corn Price on Profitability of Control Vs Phytase Enhanced Diet of Hogs

Economic Simulation model (SIMETAR) was used to investigate the effect of future corn price on profitability of control and phytase enhanced diet of hogs. The completed simulation model was used to estimate probability distribution for control vs lower excretion diet profitability under different corn prices. Data used was collected from recent field trials in Oklahoma that tested the effect of phytase enhanced diets on reducing phosphorus emission. The results showed that as the market price of corn increases control diet will be more profitable than phytase enhanced diet, given the cost of other remaining feed ingredient is constant for both the diets.profitability, SIMETAR, control diet, phytase enhanced diet, swine, Production Economics,

An Evaluation of the National Flood Insurance Program (NFIP) in Georgia

Proceedings of the 2013 Georgia Water Resources Conference, April 10-11, 2013, Athens, Georgia.Both capital and people have been moving into flood plains and other high-risk areas and there are serious issues about whether they are aware of the risk, and whether they are adequately covered and remain so over time. This paper promises to advance our understanding of how homeowners behave vis-à-vis flood risk, and ultimately, it aims to evaluate the performance of the National flood Insurance Program (NFIP) in Georgia regarding reducing vulnerability. This is done (i) by identifying participation rates in risk areas (which will determine its effectiveness) and (ii) by identifying the distribution of NFIP across income groups (which will determine its equity implications). With more than 40 years of history behind NFIP and the results well documented, the distributional implication of NFIP can be measured quantitatively using a Lorenz curve measure of inequality. The progressivity of the NFIP is measured as the departure of total county premium and program payout from per capita county income proportionality. In addition, the effectiveness of the NFIP will be measured by determining its participation rate i.e. by determining the percent of NFIP policies-in-force in a county divided by the percent of county in the flood risk zone. It is expected that the premium will be proportional since there are no income based discount in NFIP rates. However, the fact that over a third of policy holders live outside the floodplain suggests that the premium could be progressive assuming that the voluntary participation comes from the wealthiest income groups. Since both lower and higher income people live in flood hazard areas, it is expected that the payments could be progressive or regressive depending on whether the riskier area is lower income or higher income.Sponsored by: Georgia Environmental Protection Division; U.S. Department of Agriculture, Natural Resources Conservation Service; Georgia Institute of Technology, Georgia Water Resources Institute; The University of Georgia, Water Resources Faculty.This book was published by Warnell School of Forestry and Natural Resources, The University of Georgia, Athens, Georgia 30602-2152. The views and statements advanced in this publication are solely those of the authors and do not represent official views or policies of The University of Georgia, the Georgia Water Research Institute as authorized by the Water Research Institutes Authorization Act of 1990 (P.L. 101-307) or the other conference sponsors

July, 2009EFFECT OF CORN AND SOYBEAN MEAL PRICE ON PROFITABILITY OF CONTROL VS LOW EXCRETION DIETS OF FINISHING PIGS

I would like to take this opportunity to thank all the people who have been continuously supporting me to accomplish my goal. I would like to recognize my major advisor Dr. Jeffrey Vitale and would like to thank him for believing in me and for his guidance and inspiration. My special thanks go to Dr. Art Stoecker who funded my research and guided me throughout the research period. I would also like to thank my committee member Dr. Scott Carter who helped me in times to collect data and provided me the resources to conduct research. Thank you all for your tremendous support and I promise that your guidelines will always be close to my heart. My special thank to entire Agriculture Economics Department, all the faculty who have given me knowledge and have strengthened me in my field of expertise. Special thanks to Dr. Brian Adam, the then department coordinator who was the first person I spoke to when I landed to Oklahoma State’s agriculture economics department. Thanks to Anna Whitney who was always there to provide the information and guidelines. Special thanks to Dr. Mike Woods who wrote me recommendations and always talked to me very generously. Thanks to all the friends I have had in the department with whom

Housing Price Response to the Interaction of Positive Coastal Amenities and Negative Flood Risks

Since 1968 homeowners’ flood insurance in the United States has been mainly provided through the federally-run National Flood Insurance Program (NFIP), which as of December 2012 had 5.55 million NFIP policies-in-force nationwide with a total of $1.28 trillion of insured coverage (Michel-Kerjan et al, 2014). In 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act (BW-12) in order to address a number of the well-documented structural and fiscal issues of the program, including key provisions of the bill that would increase existing discounted premiums to full-risk levels. However, BW-12 was itself reformed in March 2014 with the passage of Homeowner Flood Insurance Affordability Act (HFIAA-14) that importantly curbed many of the planned BW-12 rate increases. Realtors, homebuilders, and lenders had provided steep opposition to BW-12 (WSJ, 2013) decrying the movement toward risk-based premiums as causing “property values to steeply decline and made many homes unsellable, hurting the real estate market” (Insurance Journal, March 2014). In this paper we aim to shed some further light on this depressed property value assertion through a hedonic property analysis that accounts for the potential negative housing price effects of higher flood risk (and thus higher risk-based flood insurance rates), as well as the potential positive housing price effects of living close to the water, acting together on housing sales prices in a coastal community in Texas

Analysis of Spatial Variation in Flood Risk Perception

We use hedonic property models to estimate the spatial variation in flood risk in the city of Albany, GA. In addition to knowing whether a property is in the floodplain, we have a unique dataset with actual inundation maps from tropical storm Alberto that hit Albany in 1994. In the absence of information on the structural damages caused by a flood, having information on the actual inundated area can be useful to tease out information effect of a new flood from potential reconstruction cost. We find that the discount in actually inundated properties is larger which supports our hypothesis that homeowners respond better to what they have visualized (“seeing is believing”) and also the potential reconstruction cost in addition to information effect is capitalized in property prices

Spatial Variation in Flood Risk Perception: A Spatial Econometric Approach

We use hedonic property models to estimate the spatial variation in flood risk perception in the city of Albany, GA. In addition to knowing whether a property lies in the floodplain, we have a unique dataset with actual inundation maps from tropical storm Alberto that hit Albany in 1994. In the absence of information on the structural damages caused by a flood, having information on the actual inundated area can be useful to tease out the information effect of a flood shock from potential reconstruction or other costs. We find that the discount for properties in the inundated area is substantially larger than in comparable properties in the floodplain areas that did not get inundated. Our results suggest that not accounting for whether properties in the floodplains are also in the inundated area may overestimate the informational effect of large flood events. In addition of capturing an information effect, the larger discount in inundated properties captures potential reconstruction costs, and supports a hypothesis that homeowners respond better to what they have visualized (“seeing is believing”)

An Evaluation of the National Flood Insurance Program in Georgia

The NFIP has been a subject of tremendous interest since 2005 when it was flooded with claims from hurricanes Katrina and Rita, and was eventually drowned in debt. This paper focuses on the state of Georgia that has been neglected in terms of enforcing NFIP policies. We estimate a fixed effect model pooling the data from 1978-2010 across 153 counties in Georgia to determine the determinants that influence the decision to buy flood insurance. The empirical analysis supports the hypothesis that income and price significantly influences the decision to buy the flood insurance. Our empirical findings also suggest that recent flood event and the proportion of county in the floodplain has a significant positive impact on decision to buy flood insurance. Education level and age seemed to have a significant impact on one’s decision to buy flood insurance; however, race did not have a significant impact