Floods are the most frequent and severe natural disasters in the U.S., and their occurrence is expected to increase (Wing et al., 2022). By combining and aggregating household characteristics from NFCS data with flood events from NOAA data at the county level between 2007 and 2023, this study finds evidence that households have some capacity to anticipate future flood damages to property and are more likely to hold precautionary savings. In contrast, there is insufficient evidence that flood frequency plays a significant role in the propensity to hold precautionary savings. Specifically, if property damage is expected to double over the next two years, the proportion of households with emergency savings in an average county increases by 0.12%. The two-way fixed-effects estimation controls for county and time factors, in addition to the included control variables.
