This thesis presents an analysis of subjective risk information and participation in the National Flood Insurance Program (NFIP). Data are taken from a survey of residents in flood-prone coastal regions in the southeastern U.S. Regression models are constructed to better understand factors affecting individuals’ perceived risk ambiguity related to flood risk and the role of risk preferences, risk perceptions, and especially risk ambiguity, on the decision to purchase flood insurance. This is the first study not only of the influence of risk ambiguity on NFIP participation, but also of the impact of using different risk perception measures. Results indicate that NFIP participation is significantly affected by mean perceived risk, but the influence of range/variance of perceived risk, which presents one’s perceived ambiguity, is mixed.

The National Flood Insurance Program (NFIP) introduced the Community Rating System (CRS) to encourage community-level flood mitigation and increase individual-level flood insurance uptake. This study analyzes what factors influence communities to participate in the CRS and conditional on participation, what factors affect the type and intensity of participation over time? I used historical data of policies-in-force, claims, CRS participation, and U.S. Census American Community Survey for all NFIP communities in 11 key states to answer these questions. The results show socio-demographic factors significantly and positively predict communities' likelihood of participating in the CRS, whilst flood risk variables of claims and policies held do not. Further, flood risk variable (claims payment received) as well as socio-demographic variable (income) positively influence the intensity of communities' participation in the CRS over time.