Evolutionary modelling of the macro-economic impacts of catastrophic flood events

Safarzynska, Karolina; Brouwer, Roy; Hofkes, M.W.

doi:10.1016/j.ecolecon.2013.01.016

Cited by 20 publications

(18 citation statements)

References 91 publications

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“…In standard expected utility theory, individuals maximize their expected utility by comparing the expected utility value (outcome × probability) of different strategies . This decision model assumes that households are fully informed, rational, self‐interested agents . However, individual behavior with respect to low‐probability/high‐impact risk is often better described by bounded rationality, which is characterized by the limited information‐processing capacities of the decisionmaker itself and limited information availability .…”

Section: Introductionmentioning

confidence: 99%

“…This decision model assumes that households are fully informed, rational, self‐interested agents . However, individual behavior with respect to low‐probability/high‐impact risk is often better described by bounded rationality, which is characterized by the limited information‐processing capacities of the decisionmaker itself and limited information availability . Other decision‐making models, like prospect theory, try to account for bounded rationality in individual processing of probabilities.…”

Section: Introductionmentioning

confidence: 99%

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Integrating Household Risk Mitigation Behavior in Flood Risk Analysis: An Agent‐Based Model Approach

et al. 2016

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Recent studies showed that climate change and socioeconomic trends are expected to increase flood risks in many regions. However, in these studies, human behavior is commonly assumed to be constant, which neglects interaction and feedback loops between human and environmental systems. This neglect of human adaptation leads to a misrepresentation of flood risk. This article presents an agent-based model that incorporates human decision making in flood risk analysis. In particular, household investments in loss-reducing measures are examined under three economic decision models: (1) expected utility theory, which is the traditional economic model of rational agents; (2) prospect theory, which takes account of bounded rationality; and (3) a prospect theory model, which accounts for changing risk perceptions and social interactions through a process of Bayesian updating. We show that neglecting human behavior in flood risk assessment studies can result in a considerable misestimation of future flood risk, which is in our case study an overestimation of a factor two. Furthermore, we show how behavior models can support flood risk analysis under different behavioral assumptions, illustrating the need to include the dynamic adaptive human behavior of, for instance, households, insurers, and governments. The method presented here provides a solid basis for exploring human behavior and the resulting flood risk with respect to low-probability/high-impact risks.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Integrating Household Risk Mitigation Behavior in Flood Risk Analysis: An Agent‐Based Model Approach

et al. 2016

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“…To this end, climate scientists, hydrologists, water resource engineers, urban planners, economists, social and policy scientists, health scientists and policy makers need to work together to ensure the resulting models adequately represent plausible future trajectories of the human–natural water system. Such efforts can learn from recent advances in minimal, exploratory modelling that provides insight into how different natural, built and social systems might interact and co‐evolve based on adaptive behavioural responses that reflect social and technological learning (Di Baldassarre et al, ; Safarzyńska, Brouwer, & Hofkes, ). Integrated modelling and assessment frameworks should allow for different levels of abstraction, facilitating learning and enabling different stakeholders to be involved in decision‐making processes.…”

Section: Next Stepsmentioning

confidence: 99%

Anthropocene flooding: Challenges for science and society

Razavi

Gober

Maier

et al. 2020

Hydrological Processes

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“…Firstly, household decisions in the context of natural disasters are likely subject to a large degree of risk and uncertainty. When confronted with choices involving uncertainty and risk, humans often rely on either intuitive thinking or the opinion of others (Safarzynska et al 2013). Secondly, the literature investigating the growth impacts of disasters often finds contradictory results (Cavallo et al 2013), suggesting the existence of multiple equilibria.…”

Section: Introductionmentioning

confidence: 99%

Household migration in disaster impact analysis: incorporating behavioural responses to risk

Husby

Koks

2017

Nat Hazards

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Detailed estimates of economy-wide disaster losses provide important inputs for disaster risk management. The most common models used to estimate losses are inputoutput (IO) and computable general equilibrium (CGE) models. A key strength of these models is their ability to capture the ripple effects, whereby the impacts of a disaster are transmitted to regions and sectors that are not directly affected by the event. One important transmission channel is household migration. Changes in the spatial distribution of people are likely to have substantial impacts on local labour and housing markets. In this paper, we argue that IO and CGE models suffer from limitations in representing household migration under disaster risk. We suggest combining IO and CGE models with agent-based models to improve the representation of migration in disaster impact analysis.

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Evolutionary modelling of the macro-economic impacts of catastrophic flood events

Cited by 20 publications

References 91 publications

Integrating Household Risk Mitigation Behavior in Flood Risk Analysis: An Agent‐Based Model Approach

Integrating Household Risk Mitigation Behavior in Flood Risk Analysis: An Agent‐Based Model Approach

Anthropocene flooding: Challenges for science and society

Household migration in disaster impact analysis: incorporating behavioural responses to risk

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