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Non-linear incentives, plan design, and flood mitigation: the case of the Federal Emergency Management Agency's community rating system.
- Source :
-
Journal of Environmental Planning & Management . Mar2010, Vol. 53 Issue 2, p219-239. 21p. 6 Charts, 1 Graph, 2 Maps. - Publication Year :
- 2010
-
Abstract
- A basic proposition of 'agency theory' is that output-based performance incentives encourage greater effort. However, studies find that incentive schemes can distort effort if rewards for performance are discrete or non-linear. The Federal Emergency Management Agency's (FEMA) Community Rating System (CRS) is a flood mitigation programme with a non-linear incentive design. Under this programme, localities are incentivised to implement a mix of 18 flood mitigation activities. Each activity is performance scored, with accumulated scores corresponding to a percent discount on flood insurance premiums for residents that hold National Flood Insurance policies. Discounts range from 0 to 45% and increase discretely in increments of 5%. With multivariate statistical and Geographic Information Systems analytic techniques, tests are made to find whether observed changes in annual CRS scores for participating localities in Florida are explained by non-linear incentives, adjusting for hydrologic conditions, flood disaster histories, socio-economic and human capital controls that can plausibly account for local mitigation activity scores over time. Results indicate that local jurisdictions are discount-seeking, with mitigation efforts partially driven by the non-linear incentive design of the CRS programme. The paper ends with recommendations to improve the operation FEMA's flood mitigation programme. [ABSTRACT FROM AUTHOR]
- Subjects :
- *FLOOD control
*GEOGRAPHIC information systems
*EMERGENCY management
Subjects
Details
- Language :
- English
- ISSN :
- 09640568
- Volume :
- 53
- Issue :
- 2
- Database :
- Academic Search Index
- Journal :
- Journal of Environmental Planning & Management
- Publication Type :
- Academic Journal
- Accession number :
- 48304988
- Full Text :
- https://doi.org/10.1080/09640560903529410