Changing climate – changing behavior: integrating adaptive economic behavior in land-use models

Climate change threatens economic development by increasing the probability of severe disasters like Hurricane Katrina, or recent European and Australian flooding. Rising hazard risks affect land-use and economic behavior in land markets causing non-marginal changes. New information about risks, socio-economic dynamics, and exchange of opinions alters land-use choices and associated potential damage. This presents a major scientific challenge for current policy support tools, which are designed to tackle marginal changes and omit behavioral adaptation triggered by changing climate.

Current proposal addresses this gap by incorporating adaptive expectations about land market dynamics and evolution of individual risk perception into land-use models. This project will pioneer in development of spatial agent-based models linking increasing climate-induced risks with empirically-grounded adaptive behavior. It uniquely combines knowledge from land-use modeling, spatial economics, climate change research, agent-based modeling, and theories of behavior under uncertainty, previously used apart. Data from hedonic analysis of past housing transactions and data about potential dynamics of future risk perception derived from human subjects’ experiments will be employed.

The proposal focuses on urban coastal and delta areas in the Netherlands and USA. Its broader scientific goal is to explore and manage aggregated effects of individual risk perception dynamics in hazard-prone areas, providing new policy support tools for climate adaptation. The project will result in: (i) a series of new open-access models (available via OpenABM) serving as computational experimental laboratories for exploring behavioral adaptation in a landscape with changing disaster probabilities; (ii) an innovative interdisciplinary approach for combining dynamics of human-environment systems with laboratory data used as behavioral foundation for the evolution of risk perception; (iii) implications for the design of adaptation policies supported with improved tools.

This project includes collaboration with Dutch policy-makers and two teams of senior US scholars.