Post by Sapphire Capital on May 20, 2009 8:47:33 GMT 4
Rethinking the Economics of Disaster Insurance Protection
W. Kip Viscusi
Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management
THE IRRATIONAL ECONOMIST: MAKING DECISIONS IN A DANGEROUS WORLD, Erwann Michel-Kerjan & Paul Slovic, eds., Public Affairs Books, New York, January 2010
Vanderbilt Law and Economics Research Paper No. 09-13
Abstract:
The risks of natural disasters have received substantial attention because of the substantial stakes involved and the lessons disasters provide for assessing the rationality of risky decisions. While there are some reasonable aspects of disaster insurance purchases, there are notable shortcomings as well, such as inadequate perception of these risks. After disasters have occurred, there are often errors in the opposite direction. A major social policy decision involves the extent to which the government should fund rebuilding efforts, which are difficult to deny after disasters have occurred. Zoning restrictions and other anticipatory self insurance and self protection policies will mitigate the hold-up problem.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1393761_code665784.pdf?abstractid=1393761&mirid=2
W. Kip Viscusi
Vanderbilt University - Law School; National Bureau of Economic Research (NBER); Vanderbilt University - Department of Economics; Vanderbilt University - Owen Graduate School of Management
THE IRRATIONAL ECONOMIST: MAKING DECISIONS IN A DANGEROUS WORLD, Erwann Michel-Kerjan & Paul Slovic, eds., Public Affairs Books, New York, January 2010
Vanderbilt Law and Economics Research Paper No. 09-13
Abstract:
The risks of natural disasters have received substantial attention because of the substantial stakes involved and the lessons disasters provide for assessing the rationality of risky decisions. While there are some reasonable aspects of disaster insurance purchases, there are notable shortcomings as well, such as inadequate perception of these risks. After disasters have occurred, there are often errors in the opposite direction. A major social policy decision involves the extent to which the government should fund rebuilding efforts, which are difficult to deny after disasters have occurred. Zoning restrictions and other anticipatory self insurance and self protection policies will mitigate the hold-up problem.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1393761_code665784.pdf?abstractid=1393761&mirid=2