The E-axes Forum on Climate Change, Macroeconomics, and Finance

Shan Ge

Young scholars’ webinars: “The Costs of Hedging Disaster Risk and Home Prices in the Face of Climate Change”

Young Scholars' Webinar on Climate Finance and Economics

From the abstract:

Climate models predict that many natural hazards will become increasingly damaging and costly to insure as the effects of climate change manifest. We study how the cost of hedging disaster risk changes home prices by using a 2012 law that mandated flood insurance premium increases for properties discontinuously around flood zone boundaries and based on the timing of construction. With a triple-difference design, we find that homes that experience the largest increase in premiums experience the largest decline in home values. The effect is five times larger for homes that are exposed to sea level rise than those not exposed, suggesting that insurance pricing can accelerate the incorporation of climate risk in asset markets.

 

Moderator:

Ishita Sen
Assistant Professor of Finance, Harvard Business School

Organizing Committee

Michael Barnett, Arizona State University
Alissa M. Kleinnijenhuis, Imperial College Business School
Ishita Sen, Harvard Business School
Diego Känzig, Northwestern University

Shan Ge

Shan Ge is Assistant Professor of Finance at the Stern School of Business, New York University. Dr. Shan Ge’s research studies the economics of the insurance industry and its effect on climate change. One of her research interests is on how insurance interacts with climate change. Her research has been quoted by the US Senate and featured in news outlets, such as the New York Times.

Paper and slides

The Costs of Hedging Disaster Risk and Home Prices in the Face of Climate Change (Paper)

The Costs of Hedging Disaster Risk and Home Prices in the Face of Climate Change (Slides)

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