RT Journal Article SR Electronic T1 Moral Hazard in Natural Disaster Insurance Markets: Empirical Evidence from Germany and the United States JF Land Economics JO Land Econ FD University of Wisconsin Press SP 179 OP 208 DO 10.3368/le.93.2.179 VO 93 IS 2 A1 Paul Hudson A1 W. J. Wouter Botzen A1 Jeffrey Czajkowski A1 Heidi Kreibich YR 2017 UL http://le.uwpress.org/content/93/2/179.abstract AB Moral hazard in natural disaster insurance markets results in policyholders preparing less, increasing the risk they face. However, moral hazard may not arise, due to high risk aversion or market context. We study the relationship between disaster risk reduction and insurance coverage to assess the presence of moral hazard for two different natural hazards, using four econometric models on survey data from Germany and the United States. The results show that moral hazard is absent. Nevertheless, adverse risk selection may be present. This has significant policy relevance such as opportunities for strengthening the link between insurance and risk reduction measures. (JEL Q54)