Economists have long been interested in understanding how individuals form beliefs over the likelihood of random events such as natural disasters. One reason why natural disasters have garnered attention is the finding that economic agents appear to overreact to the occurrence of a new disaster (e.g., Slovic, Kunreuther, and White 1974;Kunreuther 1976;Kunreuther et al. 1978).1 Kahneman (2011) points to the research on natural disasters as among the earliest evidence of the judgment heuristic known as availability bias.2 Nevertheless, a large and immediate change in beliefs after a disaster could be consistent with the common Bayesian learning model (DeGroot 1970;Viscusi 1991;Davis 2004).Flooding is an example of a type of rare stochastic event where detailed information regarding the likelihood of the event is accessible, but personal experience is infrequent. In most communities in the United States, decades of historical flood 1 This finding is sometimes described as an underreaction in terms of preparedness and expectations before a disaster rather than an overreaction afterward. 2 Availability bias is described as "situations in which people assess the frequency of a class or the probability of an event by the ease with which instances or occurrences can be brought to mind" (Tversky and Kahneman 1982, 11).