Decision under evolving and conditional risk – distributional effect of a coastal storm suppression system

• In Event: Environmental Resilience and Sustainability in the Face of Threat and Risk

Abstract

This study examines how interdependent decisions by public and private actors shape flood risk exposure and welfare outcomes in the context of evolving climate conditions. Focusing on the Houston-Galveston region in Texas, we integrate an econometric household sorting model with a hydrodynamic flood risk model to evaluate the distributional implications of a proposed large-scale public intervention—a coastal storm surge barrier.

Our econometric analysis, based on residential location choices between 2010 and 2020, reveals that all racial and ethnic groups show a preference for avoiding high-risk flood zones. However, the intensity of this preference varies: white and Asian households demonstrate significantly higher willingness to pay (WTP) to avoid flood exposure compared to Hispanic and Black households. At the same time, the appeal of coastal amenities introduces trade-offs that influence sorting behavior. We estimate a $10B aggregated welfare loss for all homeowners from existing floodplains (derived from the universe of 1.3 million residential properties in the HGA). Only coastal households (approx. 287,960 houses) will experience changes in floodplains due to Sea Level Rise and Changing storm climatology, which amounts to the aggregate welfare loss for these homeowners to over $4.8B USD without a coastal barrier. Our results suggests that the proposed barrier mitigates up to 46% of these losses—though its effectiveness declines under more severe SLR scenarios.

Importantly, the welfare benefits associated with the barrier are disproportionately concentrated among white homeowners, raising critical questions about distributive equity. Our findings suggest that while coastal protection infrastructure reduces physical risk, it may inadvertently exacerbate housing inequities. By coupling dynamic flood modeling with behavioral sorting and equity analysis, this study underscores the need for flood mitigation strategies that are not only efficient but also socially inclusive and equitable in their design and implementation.

Authors

• Meri Davlasheridze, Texas A&M University
  Presenting Author

• Wei GUO, University of California, Riverside
  Non-Presenting Co-Author