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| Format: | Preprint |
| Published: |
2026
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| Online Access: | https://arxiv.org/abs/2602.23379 |
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| _version_ | 1866918359045505024 |
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| author | Zhou, Yuqun |
| author_facet | Zhou, Yuqun |
| contents | Climate-driven flood risk increasingly necessitates managed retreat through government buyout programmes, yet empirical evidence documents substantial racial and economic disparities in programme implementation. Here we develop a three-level Stackelberg game to analyse how federal-local cost-sharing arrangements generate inequitable outcomes through strategic interactions among federal authorities, local governments, and heterogeneous homeowners. Our model reveals three distinct mechanisms driving inequity: differential discount rates across income groups, local governments' tax-base preservation incentives, and participation thresholds that exclude fiscally constrained communities. Numerical analysis of 34,493 households across nine flood-prone US regions demonstrates that the current Federal Emergency Management Agency 75/25 cost-sharing arrangement produces a relocation ratio gap of 0.26--low-income households relocate at roughly one-quarter the rate of high-income households. Achieving near-equity requires federal cost shares of at least 85%, though equity-weighted mechanisms can attain similar outcomes at 25% lower cost. These findings provide a theoretical foundation for understanding observed disparities and identify policy levers for more equitable climate adaptation. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2602_23379 |
| institution | arXiv |
| publishDate | 2026 |
| record_format | arxiv |
| spellingShingle | Equity Implications of Federal-Local Cost-Sharing in Flood Buyouts: A Game-Theoretic Analysis with Heterogeneous Homeowners Zhou, Yuqun Physics and Society Computer Science and Game Theory General Economics Economics 91A65, 91B32, 90C15 J.4; I.6.5 Climate-driven flood risk increasingly necessitates managed retreat through government buyout programmes, yet empirical evidence documents substantial racial and economic disparities in programme implementation. Here we develop a three-level Stackelberg game to analyse how federal-local cost-sharing arrangements generate inequitable outcomes through strategic interactions among federal authorities, local governments, and heterogeneous homeowners. Our model reveals three distinct mechanisms driving inequity: differential discount rates across income groups, local governments' tax-base preservation incentives, and participation thresholds that exclude fiscally constrained communities. Numerical analysis of 34,493 households across nine flood-prone US regions demonstrates that the current Federal Emergency Management Agency 75/25 cost-sharing arrangement produces a relocation ratio gap of 0.26--low-income households relocate at roughly one-quarter the rate of high-income households. Achieving near-equity requires federal cost shares of at least 85%, though equity-weighted mechanisms can attain similar outcomes at 25% lower cost. These findings provide a theoretical foundation for understanding observed disparities and identify policy levers for more equitable climate adaptation. |
| title | Equity Implications of Federal-Local Cost-Sharing in Flood Buyouts: A Game-Theoretic Analysis with Heterogeneous Homeowners |
| topic | Physics and Society Computer Science and Game Theory General Economics Economics 91A65, 91B32, 90C15 J.4; I.6.5 |
| url | https://arxiv.org/abs/2602.23379 |