Why do people live in areas that are prone to adverse weather conditions?

One of the question that has been asked at the beginning of the debate on abrupt climate change and progressively more adverse weather conditions, is why do people choose to live in areas that are prone to catastrophic floods or annual Hurricanes/ Tornadoes. 

BBC (2012)

BBC Magazine posted an interesting article a few days ago asking the same questions. Classical economic models would predict that housing prices in these flood prone areas (or areas where previous floods have occured) would fall. Due to the intrinsic costs of living in these areas, demand for housing should be very low. However, reports have shown that adverse events do not have a long term impact on house pricing. People still choose to live in such areas, citing reasons such as: 'it will not happen to me', 'Having a river at the bottom of the garden was a big attraction, as I like to do a bit of fishing. [And] it felt like a nice community'. 

Miceli et al (2008) describes the perceptions of flood risks in an Alpine valley in Italy. The study conducted collected information on individuals and communities living in high risk areas in order to understand the risk perception of the people living in these areas, amongst other things. They find that people perceive risks both cognitively and affectively and their perception of risk correlates significantly with disaster preparedness. With higher perception of risks, there will be increased disaster preparedness, which provides an explanation to why people might still consider living in these areas prone to adverse conditions. Furthermore, it has also been found that it is often not simply a lack of awareness, but rather, assessments of local risk based on experience that people underestimate the impact of rare or extreme event and continue to live in these disaster prone areas (Burningham et al 2007). For example, the authors highlight that when people were made aware of the history of severe flooding in certain housing areas, the general response was that they believed that castratophic events (50 or 100 year floods) will not impact them. The study also points towards denial as a factor when home owners purchase properties that have had experiences of flooding. 

However, the above explanations only look at the perspective of the home owners. One should also consider the perspective from the building companies, town councils and government institutions. Some people might consider living in these areas prone to disasters not by choice but by circumstance. The BBC article mentions that local authorities like to redevelop old industrial and mill towns, which are often near rivers. Another BBC investigation in Wales shows that even with regulations set in place, local development authorities still approved plans to develop new housing projects on river flood plains. 

Hence, we can see that there are many reason that might explain the persistence of the people living in areas subjected to areas that are prone to disasters. One should consider the different perspectives in this problem. The demand for a good is the quantity that people are willing and able to purchase at the given price. If people are unable to purchase the goods, naturally there will be no demand for such goods. Therefore, in the face of higher probabilities of adverse weather conditions due to climate change, governments should take more initiative in planning and restricting home owners' ability to built houses in areas of high risks. 



References:

Burningham, K., Fielding, J. and Thrush, D. (2007) ''It'll never happen to me': understanding public awareness of local flood risk', Disasters, 32, 2, 216-238. 

Miceli, R., Sotgiu, I. and Settanni, M. (2008) 'Disaster preparedness and perception of flood risk: A study in an alpine valley in Italy',  Journal of Environmental Psychology, 28, 2, 164-173.