New Findings from New Mexico Institute of Mining and Technology Describe Advances in Risk Management (Estimating Flood Risk Impact On Farmland Values Using Boundary Discontinuity: Evidence From Lancaster County, Pennsylvania)

2020 NOV 23 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- A new study on Risk Management is now available. According to news reporting out of Socorro, New Mexico, by NewsRx editors, the research stated, “A major consequence of climate change is the growing precipitation variability around many parts of the world leading to increased occurrences of floods. While there has been a rich literature on flood risk in the urban context, flood risk in the agricultural sector has been understudied.”

Our news journalists obtained a quote from the research from the New Mexico Institute of Mining and Technology, “The goal of this study is to estimate the impact of flood risk on farmland values in a watershed with active agricultural activities. The novelty of the study is to use the spatial boundary discontinuities along floodplains as a way to control unobserved spatial heterogeneities in a regression analysis framework. Using parcel-level data from Lancaster County (Pennsylvania, USA), we show that cropland is more vulnerable to potential flood risk compared to noncrop farmland. Specifically, cropland parcels on average experience a 13% (or $3,895/acre in 2015 USD, with the 95% confidence interval being [$510, $7352]) value reduction if exposed to a 1% or higher annual chance of flooding. The flood risk impact on noncrop farmland is statistically insignificant. The difference between cropland and noncrop farmland in valuing the potential flood risk implies different flood preparedness and risk management strategies.”

According to the news editors, the research concluded: “Based on the empirical findings, policy implications for flood insurance, agricultural water management, land-use practice, and other flood mitigation strategies are explored.”

This research has been peer-reviewed.

For more information on this research see: Estimating Flood Risk Impact On Farmland Values Using Boundary Discontinuity: Evidence From Lancaster County, Pennsylvania. Risk Analysis, 2020. Risk Analysis can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA. (Wiley-Blackwell - http://www.wiley.com/; Risk Analysis - http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1539-6924)

Our news journalists report that additional information may be obtained by contacting Haoying Wang, New Mexico Institute of Mining and Technology, Dept Business & Technol Management, 801 Leroy Pl, Socorro, NM 87801, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1111/risa.13623. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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