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This study investigates the short‐ and long‐run impact on population dynamics of the major flood in the Netherlands in 1953. A dynamic difference‐in‐differences analysis reveals that the flood had an immediate negative impact on population growth, but limited long‐term effects. In contrast, the resulting flood protection program (Deltaworks), had a persisting positive effect on population growth. As a result, there has been an increase in population in flood‐prone areas. Our results suggest a moral hazard effect of flood mitigation leading to more people locating in flood‐prone areas, increasing potential disaster costs.

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This paper examines what determines the correlation between prices and turnover in European housing markets. Using a panel vector autoregressive model, we find that there is a particularly strong feedback mechanism between prices and turnover. Momentum effects are another important reason why prices and turnover are correlated. Common underlying factors, such as GDP and interest rates, also explain part of the priceturnover correlation. The results in this paper imply that, to understand price and turnover dynamics, it is important to model prices and turnover as two interdependent processes. There is a considerable bias in the coefficient estimates of standard house price models if this dependency is not explicitly taken into account.

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