Cloudbursts and Capitalization

Sammanfattning

in Sweden using a difference-in-differences design applied to the 2021 Gävleborgand 2014 Malmö cloudbursts. Flood exposure is defined by combining blue spotflood risk polygons with gridded rainfall data, and causal effects are estimated usingtwo-way fixed effects models with DeSO-area and year-week fixed effects. The2021 Gävleborg cloudburst is associated with an approximate 4.6 percent decreasein sale prices for flood-exposed single-family homes (p = 0.081). The 2014 Malmöresult shows an approximate 6.2 percent increase (p = 0.042) but is difficult tointerpret causally, possibly reflecting localised neighbourhood appreciation duringthe 2014 to 2015 Swedish housing market boom rather than a causal flood effect.A pooled model combining both events produces a statistically non-significant estimate,consistent with the opposing event specific directions. The findings suggestthat Swedish housing markets do respond to pluvial flood events, though the moderateeffect size is consistent with universal home insurance coverage reducing buyers’direct financial exposure to flood damage.