Information Matters: Evidence from flood risk in the Irish housing market

In this paper, we test the effect of new information about flood risk on housing prices in Ireland. Our core finding is that information matters. Sales prices responded dramatically to the release of flood risk maps in 2011, with the emergence of a 3.1% price discount for dwellings at risk of flooding. This flood discount is not observed prior to the release of the new risk information, for dwellings defended by flood relief schemes, or for rental dwellings. We also document public attitudes to flood risk through survey findings that suggest a continuing information deficit in relation to flood risk.