To insure or not to insure? Analysis of foresters' willingness-to-pay for fire and storm insurance

Sauter, Philipp; Möllmann, T.; Anastassiadis, Friederike; Mußhoff, Oliver; Möhring, Bernhard

doi:10.1016/j.forpol.2016.08.005

Cited by 34 publications

(40 citation statements)

References 26 publications

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“…As a result, continued increase in the subsidy ratio will only lead to financial pressure. These findings are consistent with the researches of Sauter [35] and Ma [36]. The management enlightenment is that in order to solve the problem of insufficient supply and demand in the current forest insurance industry, we should consider the differentiated premium subsidy policy and the multilevel subsidy system.…”

Section: Impact Of the Probability Of Deforestation Occurrencesupporting

confidence: 88%

“…There are few studies on indirect subsidies (subsidies for insurance companies). These researchers emphasized that to stimulate insurance companies to innovate forest insurance products and increase insurance supply, the government should take measures such as subsidizing the insurance company's business expenses and giving it certain tax preferences [34][35][36]. Overall, the current papers on how to improve the efficiency of direct subsidies (subsidies to forestry enterprises) are still based on qualitative discussion, which inevitably can be driven either by the personal subjectivity of researchers or by organized interests.…”

Section: Introductionmentioning

confidence: 99%

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Strategies of Forestry Carbon Sink under Forest Insurance and Subsidies

Song

Peng

2019

Sustainability

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We take the forest insurance supply chain, composed of a forestry enterprise and an insurance company, as the research object. The forestry carbon sink, operated by the forestry enterprise, is the subject matter of insurance. The Stackelberg game model is constructed to study the optimal strategies of the forestry enterprise and insurance company under the forest insurance mechanism, as well as the impact of government subsidies, probability of deforestation, and carbon limit level on the decision-making and profit of the forestry enterprise and insurance company. The results show that the larger the carbon limit, the looser carbon restraint policy, which causes the forestry enterprise to reduce the scale of carbon sink forest, and the insurance company lowers the premium level. As the probability of deforestation increases, both the scale of the carbon sink forest and the premium level will decrease. Direct subsidies for the premiums of the forestry enterprise are conducive to expanding the scale of carbon sink forest, but will lead to the insurance company improving the premium level. Providing indirect subsidies to the insurance company’s operating costs will not only expand the scale of the carbon sink forest, but also lower the premium level. In the case of the same number of premium subsidies, indirect subsidies are more effective than direct subsidies in increasing the forestry enterprise’s income and promoting it to expand the forest scale.

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Section: Impact Of the Probability Of Deforestation Occurrencesupporting

confidence: 88%

Section: Introductionmentioning

confidence: 99%

Strategies of Forestry Carbon Sink under Forest Insurance and Subsidies

Song

Peng

2019

Sustainability

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“…Various researchers have studied the relationship between WTP and specific influencing factors. Those possible influencing factors include but are not limited to governmental aid (Pynn and Ljung, 1999;Wang et al, 2009;Athavale and Avila, 2011;Botzen and Van Den Bergh, 2012;Wang et al, 2012;Tian et al, 2014;Tian and Yao, 2015;Kuo, 2016;Sauter et al, 2016), gender (Kung and Chen, 2012;Yoko, 2014), age and educational background (Tian et al, 2014;Abbas et al, 2015), income (Athavale and Avila, 2011;Abbas et al, 2015;Tian and Yao, 2015), location (Wang et al, 2012), structure type (Tian et al, 2014;Tian and Yao, 2015), previous disaster experience (Seifert et al, 2013;Oral et al, 2015), risk perception (Kunreuther, 1976;Seifert et al, 2013), insurance experience (Kung and Chen, 2012;Tian et al, 2014;Wang et al, 2012;Abbas et al, 2015) and so on. As noted, factors specifically related to EMC were not accentuated in previous studies, as well as self-prevention behaviors and also a broader range of sociodemographic characteristics, including family size, family labors, agricultural labors and out-migrating labors, which are famers move to other places to work.…”

Section: Literature Reviewmentioning

confidence: 99%

Minority community willingness to pay for earthquake insurance

Zhang

Qian

2018

DPM

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Purpose The purpose of this paper is to investigate the relationship between potential affecting factors and the local communities’ willingness to pay (WTP) for housing earthquake insurance (HEI) in the context of ethnic minority communities. Design/methodology/approach A literature review was done to identify possible factors affecting WTP for HEI. Fieldwork was conducted in 2017 in Dali Minority Autonomous Prefecture, where the first Chinese HEI was launched in 2015. Interviews were done in two earthquake-prone counties, as the main ethnic minority communities in the area. A total of 536 questionnaires were collected and used as empirical data for testing the impacts mechanism. Findings Respondents’ risk perception, risk exposure, self-prevention behaviors, government aid, insurance experience and sociodemographic characteristics were hypothesized as theoretical indicators correlated to WTP for HEI. Empirical analysis results predict that WTP for HEI is significantly influenced by risk perception, insurance experience, government aid, and age and out-migrating labors. It is evident that higher risk perception and more insurance experience lead to stronger desire for HEI coverage. However, dependency on government aid negatively affects WTP for HEI. Moreover, WTP for HEI is negative in relation to age and out-migrating labors. Surprisingly, ethnic-culture factors were not statistically significant to WTP for HEI. Originality/value This paper is an attempt to identify and verify factors affecting WTP for HEI, bridging the gap of inadequate research on WTP for HEI in ethnic minority communities.

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“…Assuming a non-risk-neutral decision maker would require the calculation of a safety equivalent, which would go beyond the scope of this study. Recent studies conclude that decision makers in private forestry are rather risk-averse (Brunette et al 2014;Mußhoff and Maart-Noelck 2014;Sauter et al 2016), while others conclude that forest owners are predominately risk-loving or risk-neutral (Andersson and Gong 2010). To cover these findings it would be interesting to include risk attitude in the FPOT.…”

Section: Meaning Of El For Management Decisionsmentioning

confidence: 99%

A practical way to integrate risk in forest management decisions

Möllmann

Möhring

2017

Annals of Forest Science

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& Key message The concept of expected losses is an appropriate measure for integrating risk in the determination of the optimal rotation period and choice of tree species. & Context Natural threats are challenging forest management decisions. Essential decisions about the optimal length of a harvest period are often taken without considering risks. & Aims Here, a practical and easy to apply way to integrate risk in these decisions is shown. Furthermore, it is seen how the rotation period changes according to the risk-type and risk-level. & Methods The marginal principle of Preßler's indicator rate is developed further by including the concept of expected losses, leading to an optimal harvest age under risk. The application of the new formula is shown by a simulation, which also visualises the influence on the optimal rotation age. & Results Whether risk influences the optimal harvest age compared to a risk free solution, depends on the relationship between expected losses in terms of land rent of the succeeding stand and expected losses in terms of value growth of the existing stand. If they are equal, the rotation age stays. If the expected loss on value growth is bigger than on land rent, the rotation period will be shorter, while it will be longer if the relation is inverse. & Conclusion The concept of expected losses can be applied to practically determine the optimal rotation period under risk.

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To insure or not to insure? Analysis of foresters' willingness-to-pay for fire and storm insurance

Cited by 34 publications

References 26 publications

Strategies of Forestry Carbon Sink under Forest Insurance and Subsidies

Strategies of Forestry Carbon Sink under Forest Insurance and Subsidies

Minority community willingness to pay for earthquake insurance

A practical way to integrate risk in forest management decisions

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