Flood Risk Management: Exploring the Impacts of the Community Rating System Program on Poverty and Income Inequality

Douglas S. Noonan; Abdul‐Akeem A. Sadiq

doi:10.1111/risa.12853

journal article Jun 27, 2017

Flood Risk Management: Exploring the Impacts of the Community Rating System Program on Poverty and Income Inequality

Douglas S. Noonan Abdul‐Akeem A. Sadiq

Risk Analysis Vol. 38 No. 3 pp. 489-503 · Wiley

View at Publisher Save 10.1111/risa.12853

Abstract

AbstractFlooding remains a major problem for the United States, causing numerous deaths and damaging countless properties. To reduce the impact of flooding on communities, the U.S. government established the Community Rating System (CRS) in 1990 to reduce flood damages by incentivizing communities to engage in flood risk management initiatives that surpass those required by the National Flood Insurance Program. In return, communities enjoy discounted flood insurance premiums. Despite the fact that the CRS raises concerns about the potential for unevenly distributed impacts across different income groups, no study has examined the equity implications of the CRS. This study thus investigates the possibility of unintended consequences of the CRS by answering the question: What is the effect of the CRS on poverty and income inequality? Understanding the impacts of the CRS on poverty and income inequality is useful in fully assessing the unintended consequences of the CRS. The study estimates four fixed‐effects regression models using a panel data set of neighborhood‐level observations from 1970 to 2010. The results indicate that median incomes are lower in CRS communities, but rise in floodplains. Also, the CRS attracts poor residents, but relocates them away from floodplains. Additionally, the CRS attracts top earners, including in floodplains. Finally, the CRS encourages income inequality, but discourages income inequality in floodplains. A better understanding of these unintended consequences of the CRS on poverty and income inequality can help to improve the design and performance of the CRS and, ultimately, increase community resilience to flood disasters.

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Details

Published: Jun 27, 2017
Vol/Issue: 38(3)
Pages: 489-503
License: View

Authors

D

Douglas S. Noonan

School of Public and Environmental Affairs Indiana University‐Purdue University Indianapolis Indianapolis IN USA

A

Abdul‐Akeem A. Sadiq

School of Public Administration University of Central Florida Orlando FL USA

Cite This Article

Douglas S. Noonan, Abdul‐Akeem A. Sadiq (2017). Flood Risk Management: Exploring the Impacts of the Community Rating System Program on Poverty and Income Inequality. Risk Analysis, 38(3), 489-503. https://doi.org/10.1111/risa.12853

Flood Risk Management: Exploring the Impacts of the Community Rating System Program on Poverty and Income Inequality

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