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The Implications of Skewed Risk Perception for a Dutch Coastal Land Market: Insights from an Agent-Based Computational Economics Model

Published online by Cambridge University Press:  15 September 2016

Tatiana Filatova ,
Dawn C. Parker  and
Anne van der Veen
Tatiana Filatova
Affiliation:
Department of Management and Governance, Centre for Studies in Technology and Sustainable Development, at the University of Twente in Enschede, the Netherlands, Deltares, a Research Institute and Consultancy in Water Management, Utrecht, the Netherlands
Dawn C. Parker
Affiliation:
School of Planning at the University of Waterloo in Waterloo, Ontario
Anne van der Veen
Affiliation:
International Institute for Geo-Information Science and Earth Observation, and in the Department of Water Engineering and Management, at the University of Twente in Enschede, the Netherlands
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Abstract

Dutch coastal land markets are characterized by high amenity values but are threatened by potential coastal hazards, leading to high potential damage costs from flooding. Yet, Dutch residents generally perceive low or no flood risk. Using an agent-based land market model and Dutch survey data on risk perceptions and location preferences, this paper explores the patterns of land development and land rents produced by buyers with low, highly skewed risk perceptions. We find that, compared to representative agent and uniform risk perception models, the skewed risk perception distribution produces substantially more, high-valued development in risky coastal zones, potentially creating economically significant risks triggered by the current Dutch flood protection policy.

Keywords

land marketsrisk perceptionsagent-based modelingthe Netherlandssurvey
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 40 , Issue 3 , December 2011 , pp. 405 - 423
Copyright
Copyright © 2011 Northeastern Agricultural and Resource Economics Association 

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