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The impact of flood events on flood risk perception has important implications for policy. Applying a novel dataset featuring the flooding extents from a severe event in Colorado, we disentangle inundated properties from "near misses," defined as structures not directly flooded but located inside the 100-year floodplain. Using a triple-difference hedonic framework, we show that inundated properties inside the floodplain underwent a decrease in price after the flood, while near misses saw a relative price increase. We speculate that inundated properties are perceived as being riskier and near misses relatively less risky, suggesting the possible influence of the availability heuristic or Bayesian learning. (
Hennighausen et al. (Wed,) studied this question.