This Brief presents a benefit-cost analysis of the National Flood Insurance Program (NFIP) as
well as an evaluation of its cumulative socioeconomic effects. Created by Congress in 1968 the
NFIP provides flood insurance protection to property owners in return for local government
commitment to sound floodplain management. Since 1994 the NFIP has included a Flood Mitigation
Assistance (FMA) program to provide local communities with support for flood mitigation. This
book offers quantitative evidence of the net social benefit of the NFIP for the years 1996-2010
including an independent assessment of the consumer benefit. Second it provides
distributionally weighted analysis to show the socioeconomic effects of payments and claims.
Finally this Brief includes an analysis of the change in government revenue attributable to
the NFIP and FMA programs. The models used in each component of the analysis are usable by
others for extending and revising the analysis. Providing a comprehensive analysis of this
increasingly important federal policy this Brief will be of use to students of environmental
economics and public policy as well as those interested in risk management in the era of
climate change.
