The effect of flood experience on household mitigation-Evidence from longitudinal and insurance data

Proactive flood damage mitigation on the household level is seen as a crucial element of comprehensive flood risk management. The ongoing socio-economic development and climate change will further increase the relevance of flood risks in the future. This paper analyses the causal effect of flood experience on mitigation decisions of households. It contributes to the emerging literature on the determinants of private flood mitigation and adopts data which has rarely been used in the field: Instead of cross-sectional data, longitudinal data of household surveys before and after a major flood event in Germany is used (N > 7,400). Flood experience is elicited by three different data sources: reports of heads of households, issuance of flood alerts, and damage reports of the insurance industry. The results show a causal effect of insured flood damage on private flood mitigation and a correlation of mitigation with self-reported flood experience. The estimated effects differ for mitigation types (higher for behavioural options, such as “adapted use”) and household types (higher for better educated heads of households).