Homeowner decisions to retrofit to reduce hurricane-induced wind and flood damage

Abstract

Even as new incentive programs emerge to encourage homeowners to strengthen their homes so as to reduce the risk of damage in extreme events, little is known about how homeowners make such decisions. In this paper, we combine revealed and stated preference survey data to develop separate mixed logit models for homeowner decisions about retrofits aimed at addressing four different types of hurricane damage—wind damage to the roof, openings (windows, doors), and roof-to-wall connection, and flood damage. Results provide evidence that offering a grant increases the likelihood of retrofitting, but offer no such evidence for incentives in the form of low interest loans or insurance premium reductions. The models also suggest that the probability of retrofitting varies by type, with the most interest in strengthening openings, and that homeowners are more likely to retrofit when they are closer to the coast, younger, in newer homes, or within a year of a hurricane experience.