Neighborhood effects in climate change adaptation behavior: empirical evidence from Germany

Frequency and severity of extreme weather events, such as floods or heat waves, increase as a result of climate change. Therefore, it is important to investigate which factors might influence adaptation decisions at the household level. In this context, we examine whether adaptation behavior is related to adaptation decisions reported by neighboring households or to the perception that neighbors have implemented such measures. The empirical analysis is based on a large-scale household survey in Germany (4784 geo-located households) and multivariate regressions of different types of adaptation behavior: structural/behavioral flood and heat adaptation measures as well as the purchase of flood insurance for residential buildings and contents. We contribute to existing research inter alia by providing first insights on neighborhood effects regarding heat adaptation and by considering adaptation behavior as it is reported by neighbors, rather than as it is perceived by survey respondents. The results suggest positive neighborhood effects in the context of structural adaptation measures, but no effects on insurance purchase decisions. Neighborhood effects on flood adaptation are stronger for households without prior flood experience and depend on available household income. These findings show that individuals' climate adaptation behavior may be affected by the observed behavior of social peers. Therefore, neighborhood effects are important to be considered by policy-makers to strengthen private adaptation behavior.