Price of Permits: Measuring the Economic Impacts of Wetland Development on Flood Damages in Florida

Abstract

Floods continue to pose a significant threat to the property and safety of human populations in the United States. The economic impact from floods is estimated in the billions of dollars annually, and these losses are exacerbated by increasing development. This article examines the impact of wetland alteration on flood damage among local jurisdictions in Florida over a 7-year period. Specifically, we measure wetland loss through the record of permits granted under Section 404 of the Clean Water Act. Results show that, after controlling for environmental and socioeconomic variables, the number, type, and location of wetland permits are a significant predictor of flood damages.