Van der Straten’s paper (Flooded House or Underwater Mortgage? The Implications of Rising Climate Risk and Adaptation on Housing, Income, and Wealth’) examines the relationship between financial constraints and adaptation to physical climate risk at household level.

Van der Straten shows that low-income households are more vulnerable to climate risk. Because of binding financial constraints, they fail to optimally reduce their vulnerability to the impacts of physical climate risk. Besides growing wealth inequality, this also leads to spillover effects, that effectively reduce the welfare of future generations. As low-income households become more constrained as the impacts of climate change intensify, the adaptation gap widens over time.

Yasmine van der Straten is a PhD candidate in Finance at the Amsterdam Business School and Tinbergen Institute, supervised by Prof. Dr. E.C. Perotti and Prof. Dr. F. Van der Ploeg. Her research focuses on understanding the effects of financial frictions on effective strategies for addressing climate change.

About the CEPR European Conference on Household Finance

The CEPR European Conference on Household Finance presents research on household financial behaviour and on how it is influenced by other choices, government policies, and the overall economic environment. The conference is organised by CEPR Research and Policy Network on Household Finance (RPN) and the Collegio Carlo Alberto in Turin, with the support of the PhD programme at EDHEC, the National Bank of Denmark and the Queen Mary University of London.