On framing flood risk communications through maps: Effects on the real estate market

Abstract

Flood maps are commonly used for flood risk communication. Misinterpretation of these maps can lead to over-heightened flood risk perception, with adverse risks for real estate markets. We, therefore, aim to identify an appropriate approach for framing these maps to mitigate such risks. To do this, we carry out five randomised control trials (RCT) in the UK and Pakistan, with each RCT asking a different group of 40 residents in each country to specify their willingness-to-pay (WTP) for coastal residential properties. In the first RCT, we provide no flood risk map. In each subsequent RCT, we provide a flood risk map framed differently. Our flood risk map frames include those with technical language, colour variations, and more accessible risk information. Our findings indicate that real estate demand uncertainty increases in response to flood risk maps, regardless of the framing approach used. We find that there is less WTP for properties in any zones with flood risk information, regardless of whether the risk is very low. This finding indicates that risk aversion takes precedence in real estate decisions under flood risk maps, leading to property devaluation in all flood risk zone categories. We discuss the wider implications of these findings.