Why does individual risk perception matter in land use modeling? Combining survey data and agent-based land market model

Abstract

This paper aims to understand the effects of biases in individual flood risk perception on aggregated land use patterns and their implications for macro policy. We develop a spatially explicit land market model and param-eterize individual risk perceptions with data from a survey held in the Nether-lands in 2008. Two sets of experiments are presented. A model with heteroge-neous agents produces qualitatively different results compared to a model with homogeneous agents. Individuals with low flood risk perception drive urban developments into the economically inefficient zone and leading to the increas-ing potential damage.