Residents’ Preferences for Rural Housing Disaster Insurance Attributes in Central and Western Tibet

Understanding the heterogeneous preferences of individuals for disaster insurance attributes is critical for product improvement and policy design.In an era of global environmental change,the Qinghai-Tibet Plateau is a hotspot of natural hazards.Improving the capability of rural housing disaster insurance to foster local residents’disaster resilience is of great signifcance but remains under addressed.We used a discrete choice experiment approach to provide the frst estimates of rural residents’preferences for rural housing disaster insurance attributes in central and western Tibet.We estimated residents’preferences and willingness-to-pay for the sum insured,subsidy rate,insured object,and perils covered.The potential impacts of increasing the sum insured,expanding the insured object,and lowering subsidy rates were evaluated.Our results suggest that residents prefer products with a high sum insured,high subsidy rate,and a complete list of insured objects.Residents who have experienced specifc hazards tend to prefer the corresponding perils covered.Females and residents who have a closer social network are more likely to purchase insurance.Product improvement and policy simulation results suggest that,while lowering the subsidy rate,increasing the sum insured and expanding the insured object could promote participation and improve residents’welfare.Our results could improve the understanding of the preferences of households in remote regions and support policy implementations.

French Insurance and Flood Risk: Assessing the Impact of Prevention Through the Rating of Action Programs for Flood Prevention

French insurance is part of a public-private partnership with the French State to compensate flood-related damages, and there is growing concern among insurers about damaging climatic events. To promote preventive actions as well as to take them into account in flood risk assessment, insurers have recently expressed the need to develop a rating system of preventive actions. This study identified Action Programs for Flood Prevention (Programme d’Action pour la Prévention des Inondations—PAPI) as the key French public policy instrument: they provide an overview of the diversity of actions that are conducted locally at the relevant risk basin scale. A database of all intended actions in the 145 launched PAPIs was constructed and the actions were coded (88 codes). The analysis consisted of two steps: (1) We conducted an expert valuation using the Analytic Network Process and the Analytic Hierarchy Process, aiming at creating an experimental national rating system. The results show the importance of implementing an integrated strategy that particularly emphasizes land use planning and urban planning. This appears even sounder as individual actions show relatively limited effectiveness. (2) The ratings of actions were applied to each PAPI according to their implemented actions. The resulting scores for individual PAPIs, as local risk coping capacity indicators, show great variance ranging from 8 to 324 points. This confirms the need to take prevention into account in flood risk assessment.

Are Disasters a Risk to Regional Fiscal Balance?Evidence from Indonesia

Indonesia is an archipelago country and is fairly vulnerable to disasters. While disasters generally affect government revenue and expenditure, their effects likely vary by country. This study examines the effect of disasters on the fiscal balance, revenue, and expenditure of local governments. We used panel data and fixed effects methods to estimate the degree to which disaster severity influences budgetary solvency at the district and provincial levels in Indonesia between 2010 and 2018. This study revealed that disasters can strain fiscal balance at the district and provincial levels due to a decrease in own-source revenue and an increase in social assistance expenditure, capital expenditure, consumption expenditure, and unexpected expenditure. The district expenditure most threatened by disasters is consumption expenditure, while the provincial expenditure most threatened is unexpected expenditure. We also found that an increase in capital expenditure can lead to financial burden due to delays of planned projects or post-disaster reconstruction. Based on these findings, it is clear that some forms of insurance or other financing schemes are necessary to mitigate the adverse impacts of disasters on regional fiscal balance.

Modeling Impact of Hurricane Damages on Income Distribution in the Coastal U.S.

This article examines the impact of catastrophic hurricane events on income distribution in hurricane states in the United States. Media claims have been made and the perception created that the most damaging impact of hurricanes is on the lowest income population in the affected states. If these claims are true, they may have serious implications for the insurance industry and government policy makers. We develop a panel data, fixed effects econometric model that includes hurricane-impacted states as cross-sections using annual data for a period of almost 100 years. The Gini coefficient is used as a measure of income inequality, and is a function of normalized hurricane economic damages, gross domestic product(GDP), a set of socioeconomic variables that serves as a control, time trend, and cross-sectional dummy variables.Findings indicate that for every 100 billion US dollars in hurricane economic damages there is an increase in income inequality by 5.4 % as measured by Gini coefficient.Political, sociodemographic, and economic variables are also significant. These include such variables as the political party controlling the U.S. Senate, the proportion of nonwhite population by state, and GDP. Time trend is a positive and significant variable, suggesting an increase in income inequality over time. There are significant differences among the states included in the study. Our results demonstrate that different segments of the population are differently impacted by hurricanes and suggest how that differential impact could be considered in future government policies and business decisions, particularly those made by the insurance industry.