Risk preferences, risk perceptions, and flood insurance

Land Economics

Volumn 89, Issue 2, 2013, Pages 227-245

  Petrolia, Daniel R ^a   Landry, Craig E ^b   Coble, Keith H ^a  

^a MISSISSIPPI STATE UNIVERSITY   (United States)

^b EAST CAROLINA UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

FLOOD; INSURANCE SYSTEM; POLICY MAKING; RISK ASSESSMENT; RISK PERCEPTION;

EID: 84874959038     PISSN: 00237639     EISSN: None     Source Type: Journal    
DOI: 10.3368/le.89.2.227     Document Type: Article

References (64)

1. Anderson, Dan R. 1974. "The National Flood Insurance Program: Problems and Potential." Journal of Risk and Insurance 41 (4): 579-600.
2. Ashley, Sharon T., and Walker S. Ashley. 2008. "The Storm Morphology of Deadly Flooding Events in the United States." International Journal of Climatology 28 (4): 493-503.
3. Baker, Justin, W. Douglas Shaw, David Bell, Sam Brody, Mary Riddel, Richard T. Woodward, and William Neilson. 2009. "Explaining Subjective Risks of Hurricanes and the Role of Risks in Intended Moving and Location Choice Models." Natural Hazards Review 10 (3): 102-12.
4. Baumann, Duane D., and John H. Sims. 1978. "Flood Insurance: Some Determinants of Adoption." Economic Geography 54 (3): 189-96.
5. Bin, Okmyung, Thomas W. Crawford, Jamie B. Kruse, and Craig E. Landry. 2008. "Viewscapes and Flood Hazard: Coastal Housing Market Response to Amenities and Risk." Land Economics 84 (3): 434-48.
6. Bin, Okmyung, Jamie Brown Kruse, and Craig E. Landry. 2008. "Flood Hazards, Insurance Rates, and Amenities: Evidence from the Coastal Housing Market." Journal of Risk and Insurance 75 (1): 63-82.
7. Bin, Okmyung, and Stephen Polasky. 2004. "Effects of Flood Hazards on Property Values: Evidence before and after Hurricane Floyd." Land Economics 80 (4): 490-500.
8. Botzen, W. J. W., J. C. J. H. Aerts, and J. C. J. M. van den Bergh. 2009. "Willingness of Homeowners to Mitigate Climate Risk through Insurance." Ecological Economics 68 (8-9): 2265-77.
9. Braun, Michael, and Alexander Muermann. 2004. "The Impact of Regret on the Demand for Insurance." Journal of Risk and Insurance 71 (4): 737-67.
10. Brody, Samuel D., Jung Eun Kang, and Sarah Bernhardt. 2010. "Identifying Factors Influencing Flood Mitigation at the Local Level in Texas and Florida: The Role of Organizational Capacity." Natural Hazards 52 (1): 167-84.
11. Brody, Samuel D., Sammy Zahran, Wesley E. Highfield, Sarah P. Bernhardt, and Arnold Vedlitz. 2009. "Policy Learning for Flood Mitigation: A Longitudinal Assessment of the Community Rating System in Florida. Risk Analysis 29 (6): 912-29.
12. Browne, Mark J., and Robert E. Hoyt. 2000. "The Demand for Flood Insurance: Empirical Evidence." Journal of Risk and Uncertainty 20 (3): 291-306.
13. Camerer, Colin F., and Howard Kunreuther. 1989. "Decision Processes for Low-Probability Events: Policy Implications." Journal of Policy Analysis and Management 8 (4): 565-92.
14. Carbone, Jared C., Daniel G. Hallstrom, and V. Kerry Smith. 2006. "Can Natural Experiments Measure Behavioral Responses to Environmental Risks?" Environmental and Resource Economics 33 (3): 273-97.
15. Chivers, James, and Nicholas E. Flores. 2002. "Market Failure in Information: The National Flood Insurance Program." Land Economics 78 (4): 515-21.
16. Cohen, Alma, and Liran Einav. 2007. "Estimating Risk Preferences from Deductible Choice." American Economic Review 97 (3): 745-88.
17. Dehring, Carolyn A. 2006. "Building Codes and Land Values in High Hazard Areas." Land Economics 82 (4): 513-28.
18. Dixon, Lloyd, Noreen Clancy, Seth A. Seabury, and Adrian Overton. 2006. The National Flood Insurance Program's Market Penetration Rate: Estimates and Policy Implications. Report for the Federal Emergency Management Agency (contract #282-98-0029). Santa Monica, CA: RAND Corporation.
19. Greene, William H. 2002. Econometric Analysis. 4th ed. Upper Saddle River, NJ: Prentice Hall.
20. Hallstrom, Daniel G., and V. Kerry Smith. 2005. "Market Responses to Hurricanes." Journal of Environmental Economics and Management 50 (3): 541-61.
21. Harrison, David M., Greg T. Smersh, and Arthur L. Schwartz. 2001. "Environmental Determinants of Housing Prices: The Impact of Flood Zone Status." Journal of Real Estate Research 21 (1-2): 3-20.
22. Holt, Charles A., and Susan K. Laury. 2002. "Risk Aversion and Incentive Effects." American Economic Review 92 (5): 1644-55.
23. Kachelmeier, Steven J., and Mohamed Shehata. 1992. "Examining Risk Preferences under High Monetary Incentives: Experimental Evidence for the People's Republic of China." American Economic Review 82 (5): 1120-40.
24. Kahneman, Daniel, and Amos Tversky. 1979. "Prospect Theory: An Analysis of Decision under Risk." Econometrica 47 (2): 263-91.
25. Kaplow, Louis. 1991. "Incentives and Government Relief for Risk." Journal of Risk and Uncertainty 4 (2): 167-75.
26. Kousky, Carolyn. 2010a. "Learning from Extreme Events: Risk Perceptions after the Flood." Land Economics 86 (3): 395-422.
27. Kousky, Carolyn. 2010b. "Understanding the Demand for Flood Insurance." Natural Hazards Review 12 (2): 96-110.
28. Kousky, Carolyn, Erzo F. P. Luttmer, and Richard J. Zeckhauser. 2006. "Private Investment and Government Protection." Journal of Risk and Uncertainty 33 (1): 73-100.
29. Kriesel, Warren, and Craig Landry. 2004. "Participation in the National Flood Insurance Program: An Empirical Analysis for Coastal Properties." Journal of Risk and Insurance 71 (3): 405-20.
30. Kunreuther, Howard. 1978. Disaster Insurance Protection: Public Policy Lessons. New York: Wiley and Sons.
31. Kunreuther, Howard. 1984. "Causes of Underinsurance against Natural Disasters." Geneva Papers on Risk and Insurance 9 (31): 206-20.
32. Kunreuther, Howard. 1996. "Mitigating Disaster Losses through Insurance." Journal of Risk and Uncertainty 12 (2-3): 171-87.
33. Kunreuther, Howard. 2006. "Disaster Mitigation and Insurance: Learning from Katrina." Annals of the American Academy of Political and Social Science 604 (1): 208-27.
34. Kunreuther, Howard, and Mark Pauly. 2004. "Neglecting Disaster: Why Don't People Insure against Large Losses?" Journal of Risk and Uncertainty 28 (1): 5-21.
35. Kunreuther, Howard. 2006. "Rules Rather than Discretion: Lessons from Hurricane Katrina." Journal of Risk and Uncertainty 33 (1-2): 101-16.
36. Kunzelman, Michael. 2007. "Jury Picked to Hear Katrina Insurance Lawsuit." Washington Post, January 8, 2007. Available at www.washingtonpost.com/wp-dyn/content/article/2007/01/08/AR2007010801285.html (accessed September 4, 2012).
37. Landry, Craig E., and Mohammad R. Jahan-Parvar. 2011. "Flood Insurance Coverage in the Coastal Zone." Journal of Risk and Insurance 78 (2): 361-88.
38. Laury, Susan K., and Charles A. Holt. 2005. "Further Reflections on Prospect Theory." Working paper. Department of Economics, Andrew Young School of Policy Studies, Georgia State University.
39. Lecce, S. A. 2000. "Spatial Variations in the Timing of Annual Floods in the Southeastern United States." Journal of Hydrology 235 (3-4): 151-69.
40. Lusk, Jayson L., and Keith H. Coble. 2005. "Risk Perceptions, Risk Preference, and Acceptance of Risky Food." American Journal of Agricultural Economics 87 (2): 393-405.
41. MacDonald, Don N., Harry L. White, Paul M. Taube, andWilliam L. Huth. 1990. "Flood Hazard Pricing and Insurance Premium Differentials: Evidence from the Housing Market." Journal of Risk and Insurance 57 (4): 654-63.
42. McClelland, Gary H., William D. Schulze, and Don L. Coursey. 1993. "Insurance for Low-Probability Hazards: A Bimodal Response to Unlikely Events." Journal of Risk and Uncertainty 7 (1): 95-116.
43. Michel-Kerjan, Erwann O. 2010. "Catastrophe Economics: The National Flood Insurance Program." Journal of Economic Perspectives 24 (4): 165-86.
44. Michel-Kerjan, Erwann O., and Carolyn Kousky. 2010. "Come Rain or Shine: Evidence on Flood Insurance Purchases in Florida." Journal of Risk and Insurance 77 (2): 369-97.
45. Michel-Kerjan, Erwann, and Howard Kunreuther. 2011. "Redesigning Flood Insurance." Science 333 (6041): 408-9.
46. Michel-Kerjan, Erwann, Sabine Lemoyne de Forges, and Howard Kunreuther. 2012. "Policy Tenure under the U.S. National Flood Insurance Program (NFIP)." Risk Analysis 32 (4): 644-58.
47. Miles, Brian, and Stephanie Morse. 2007. "The Role of News Media in Natural Disaster Risk and Recovery." Ecological Economics 63 (2-3): 365-73.
48. Mossin, Jan. 1968. "Aspects of Rational Insurance Purchasing." Journal of Political Economy 76 (4): 552-68.
49. Naoi, Michio, Miki Seko, and Kazuto Sumita. 2010. "Community Rating, Cross Subsidies and Underinsurance: Why So Many Households in Japan Do Not Purchase Earthquake Insurance." Journal of Real Estate Finance and Economics 40 (4): 544-61.
50. Pope, Jaren C. 2008. "Do Seller Disclosures Affect Property Values? Buyer Information and the Hedonic Model." Land Economics 84 (4): 551-72.
51. Pricewaterhouse Coopers. 1999. Study of the Economic Effects of Charging Actuarial Based Premium Rates for Pre-FIRM Structures I. Executive Summary, May 14. Washington, DC: Pricewaterhouse Coopers.
52. Raschky, Paul A., Reimund Schwarze, Manijeh Schwindt, and Ferdinand Zahn. 2010. "Uncertainty of Governmental Relief and the Crowding Out of Insurance." Working Paper #2010-03. Faculty of Economics and Statistics, University of Innsbruck.
53. Raschky, Paul A., and Hannelore Weck-Hannemann. 2007. "Charity Hazard: A Real Hazard to Natural Disaster Insurance?" Environmental Hazards 7 (4): 321-29.
54. Rees, Ray, and Achim Wambach. 2008. "The Microeconomics of Insurance." Foundations and Trends in Microeconomics 4 (1-2).
55. Schwarz, Norbert, Herbert Bless, Fritz Strack, Gisela Klumpp, Helga Rittenauer-Schatka, and Annette Simons. 1991. "Ease of Retrieval as Information: Another Look at the Availability Heuristic." Journal of Personality and Social Psychology 61 (2): 195-202.
56. Shaik, Saleem, Keith H. Coble, Thomas O. Knight, Alan E. Baquet, and George F. Patrick. 2008. "Crop Revenue and Yield Insurance Demand: A Subjective Probability Approach." Journal of Agricultural and Applied Economics 40 (3): 757-66.
57. Sims, John H., and Duane D. Baumann. 1987. "The Adoption of Residential Flood Mitigation Measures: What Price Success?" Economic Geography 63 (3): 259-72.
58. Sisco, Annette. 2009. "Insurance Woes Still Frustrate Mississippi Gulf Coast." Times-Picayune, Friday, August 28. Available at http://blog.nola.com/guesteditorials/2009/08/insurance_woes_still_frustrate.html (accessed September 4, 2012).
59. Smith, V. Kerry, Jared C. Carbone, Jaren C. Pope, Daniel G. Hallstrom, and Michael E. Darden. 2006. "Adjusting to Natural Disasters." Journal of Risk and Uncertainty 33 (1): 37-54.
60. Smith, Vernon L. 1968. "Optimal Insurance Coverage." Journal of Political Economy 76 (1): 68-77.
61. Talberth, John, Robert P. Berrens, Michael McKee, and Michael Jones. 2006. "Averting and Insurance Decisions in the Wildland-Urban Interface: Implications of Survey and Experimental Data forWildfire Risk Reduction Policy." Contemporary Economic Policy 24 (2): 203-23.
62. Troy, Austin, and Jeff Romm. 2004. "Assessing the Price Effects of Flood Hazard Disclosure under the California Natural Hazard Disclosure Law (AB 1195)." Journal of Environmental Planning and Management 47 (1): 137-62.
63. Tversky, Amos, and Daniel Kahneman. 1973. "Availability: A Heuristic for Judging Frequency and Probability." Cognitive Psychology 5 (2): 207-32.
64. U.S. General Accounting Office. 1983. National Flood Insurance Program: Major Changes Needed If It Is to Operate without a Federal Subsidy. RCED-83-53. Washington, DC: GAO.