Deciding Whether to Invest in Mitigation Measures: Evidence From Florida

Abstract

Prior research provides theoretical insight into factors likely to impact the decision to mitigate such as the degree of risk aversion, the cost of market insurance, and the cost of self‐insurance. We provide empirical evidence related to several hypotheses from the self‐insurance literature on the decision to mitigate.

The Determinants of Private Flood Mitigation Measures in Germany Evidence from a Nationwide Survey

“…In the light of these results it seems that physical flood mitigation measures and financial flood insurance policies are not seen as perfect substitutes, and indeed they partly cover different risks, as discussed before. Similar results (comparably high mitigation behaviour among insured households) are found in other studies for the German context (Thieken et al 2006) and in the USA for wind storm mitigation/insurance (Carson et al 2013;Chatterjee and Mozumder 2014;Petrolia et al 2013). …”

“…More literature is available on private flood mitigation e.g. in Denmark (Koerth et al 2013), France (Poussin, Botzen, and Aerts 2013), Italy (Miceli, Sotgiu, and Settanni 2008), Japan (Takao et al 2004;Zhai et al 2006), Switzerland (Siegrist and Gutscher 2008), the UK (Bichard and Kazmierczak 2012), and the US (Carson, McCullough, and Pooser 2013;Lindell and Hwang 2008). The sample sizes of the household surveys and the statistical analyses vary between less than 150 (Koerth et al 2013) and more than 2000 (Takao et al 2004).…”

“…Other authors focus on the tangible activities as listed in the categorisation above (Bichard and Kazmierczak 2012;Bubeck et al 2013;Carson et al 2013;Zaalberg et al 2009). …”

“…That means private mitigation is crowded out by insurance. For Florida, Carson et al find ambiguous relationships of insurance coverage with private mitigation measures (Carson et al 2013): On the one hand, households with insurance coverage tend to decide for (additional) private mitigation measures, on the other hand the extent of those measures is on average less pronounced than for non-insured households. For the Netherlands, Botzen et al report a higher self-reported willingness to invest in the elevation of a new house if the respondent is also willing to pay for flood insurance .…”

Social Marketing Analysis of Attitude Toward Compulsory Earthquake Insurance in Turkey(Türkiye’de Zorunlu Deprem Sigortasına Yönelik Tutumun Sosyal Pazarlama Kapsamında Analizi)

“…In short, earthquake insurances, in general, are expected to enable homeowners to confront future catastrophic disasters in addition to encouraging households to adopt relevant cost-effective measures to cope with catastrophic losses. Therefore, one of the most important themes in policy evaluation is to investigate the likely demand and the attitudes of property owners towards buying earthquake insurance and their willingness to pay for the insurance (Quiggin, 2002;Carson, McCullough, Pooser;2013). An analysis of low level purchases of insurance requires the investigating of the potential lack of cognitive ability to assess the loss and probability of a catastrophe (Gregory, Lichtenstein and Slovic 1993;Kunreuther and Pauly 2004;Kriesel and Landry 2004).…”