IGS University of Twente
Research group CSTM

Water governance

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

NWO VENI (2012-2016) - €250.000

Climate change threatens economic development by increasing the probability and severity of natural disasters like Hurricane Katrina and Sandy, or recent European and Australian flooding. Rising hazard risks affect land-use and economic behavior in land markets potentially 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, in which economic components are designed to tackle marginal changes and omit behavioral adaptation triggered by changing climate.

The VENI project addresses this gap by incorporating adaptive expectations about land market dynamics and evolution of individual risk perception into land-use models. Within this project I develop 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. Data from hedonic analysis of past housing transactions and data about potential dynamics of future risk perception derived from human subjects’ experiments is being employed.

The project 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.

Collaborating institutions: East Carolina University (USA), Deltares (NL)