Behavioural limits of market-led flood-risk allocation: Loss normalisation, investment discounting and planning-led land-use governance in urban China

Whether recurrent flood exposure deters demand for flood-exposed urban land, a deterrence logic well established in mature Anglo-American property markets, is a growing consideration for land-use planning under climate change. This question travels poorly to dense, platform-mediated Chinese urban housing markets, where households face repeated flooding at first hand while statutory hazard disclosure remains comparatively thin. Drawing on a pan-Chinese survey of 505 urban residents across 29 provinces, with 52 % in the coastal high-flood-risk belt, this paper develops and tests a structural model of housing purchase intention under urban flood risk. The model integrates a loss-normalisation block (perceived loss tolerability, investment discounting), a risk-cognition block (perceived flood risk, flood-information salience) and the proximal theory of planned behaviour. Covariance-based structural equation modelling yields three findings consequential for land-use planning. First, perceived loss tolerability raises purchase intention directly, while investment discounting raises it through attitude, so that both absorb the flood-risk signal rather than transmitting deterrence. Second, recurrent-event habituation and optimism bias depress perceived risk and feed both mechanisms, giving the levee effect a micro-level foundation. Third, the attitude-to-intention path is not significant, with subjective norm dominating intention, and objective flood knowledge does not moderate these effects. Taken together, the results suggest that demand-side responses alone are unlikely to steer development away from flood-exposed urban land, which points to a larger role for planning in risk-sensitive land allocation.