Social learning about climate risks

Yilan Xu, Sébastien Box-Couillard

Research output: Contribution to journalArticlepeer-review

Abstract

With a social network adjacency matrix constructed from the Facebook Social Connectedness Index (SCI), this paper examines whether social learning facilitates climate risk perception updates to inform climate adaptation. We find that Hurricanes Harvey and Irma-induced regional flooding increased flood insurance policies nationwide to the extent of each county's social network proximity to the flooded areas, with a corresponding update in climate risk perception. Social learning resulted in an additional 250,000 policies in flooded counties and 81,000 policies in unflooded counties over 3 years. We find evidence of the salience effect but no support for adverse selection or over-insurance.

Original languageEnglish (US)
Pages (from-to)1172-1191
Number of pages20
JournalEconomic Inquiry
Volume62
Issue number3
Early online dateMar 1 2024
DOIs
StatePublished - Jul 2024

Keywords

  • flood insurance
  • Hurricane Harvey
  • Social Connectedness Index (SCI)
  • social learning
  • social network

ASJC Scopus subject areas

  • General Business, Management and Accounting
  • Economics and Econometrics

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