Who Has the Upper HAND in a Hurricane?

<h3>Abstract</h3> Flood risk is increasing in the United States, but how property markets respond to this hazard is unclear. Focusing on Houston, Texas, we analyze changes in flood risk capitalization in property prices after three major Gulf Coast hurricanes. We compare two measures of flood risk–floodplain designations from the Federal Emergency Management Agency (FEMA), and a hydrologically-imputed, continuous measure, Height Above the Nearest Drainage (HAND). HAND affects property prices after a storm in intuitive ways, while we observe counterintuitive post-storm price premiums within FEMA floodplains. Plausibly exogenous measures like HAND may be useful tools for characterizing flood risk in economic analyses.