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Husby, T., de Groot, H., Hofkes, M., and Dröes, M. (2014). Do floods have permanent effects? evidence from the Netherlands. Journal of Regional Science, 54(3):355-377.

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    Journal of Regional Science

This study investigates the short- and long-run impact on population dynamics of the major flood in the Netherlands in 1953. A dynamic difference-in-differences analysis reveals that the flood had an immediate negative impact on population growth, but limited long-term effects. In contrast, the resulting flood protection program (Deltaworks), had a persisting positive effect on population growth. As a result, there has been an increase in population in flood-prone areas. Our results suggest a moral hazard effect of flood mitigation leading to more people locating in flood-prone areas, increasing potential disaster costs. © 2014 Wiley Periodicals, Inc.