RT Journal Article
SR Electronic
T1 Risk Preferences, Risk Perceptions, and Flood Insurance
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 227
OP 245
DO 10.3368/le.89.2.227
VO 89
IS 2
A1 Petrolia, Daniel R.
A1 Landry, Craig E.
A1 Coble, Keith H.
YR 2013
UL http://le.uwpress.org/content/89/2/227.abstract
AB We combine household-level data on the choice to purchase flood insurance with experiment-based risk preference data and subjective risk perception data. The sample covers a wide geographic area (the entire U.S. Gulf Coast and Florida’s Atlantic Coast) and includes individuals exposed to varying levels of risk. This work represents one of very few analyses to do so. Results indicate that our experiment-based measure of risk aversion over the loss domain positively and significantly correlates with the decision to purchase a flood policy, as do perceived expectations of hurricane damage, eligibility for disaster assistance, and credibility of insurance providers. (JEL D81, R22)