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Disaster Mitigation and Insurance: Learning from Katrina

Author

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  • Howard Kunreuther

    (Risk Management and Decision Processes Center at the Wharton School of the University of Pennsylvania)

Abstract

Hurricane Katrina illustrates the natural disaster syndrome . Prior to a disaster, individuals in hazard-prone regions do not voluntarily adopt cost-effective loss reduction measures. The federal government then comes to the rescue with disaster assistance even if it claimed it had no intention of doing so prior to the event. There are a number of reasons why individuals do not protect themselves prior to a disaster. They underestimate the likelihood of a future disaster, often believing that it will not happen to them; have budget constraints; are myopic in their behavior; and/or do not want to be the only one on the block modifying their structure. Given this lack of interest in voluntary protection, benefit-cost analysis can determine when a well-enforced building code would be appropriate. The article concludes by highlighting the importance of public-private partnerships as a way of reducing future disaster losses and aiding the recovery process.

Suggested Citation

  • Howard Kunreuther, 2006. "Disaster Mitigation and Insurance: Learning from Katrina," The ANNALS of the American Academy of Political and Social Science, , vol. 604(1), pages 208-227, March.
    • Handle: RePEc:sae:anname:v:604:y:2006:i:1:p:208-227
    DOI: 10.1177/0002716205285685
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    References listed on IDEAS

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    Cited by:

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    4. Mona Ahmadiani & Susana Ferreira & Craig E. Landry, 2019. "Flood Insurance and Risk Reduction: Market Penetration, Coverage, and Mitigation in Coastal North Carolina," Southern Economic Journal, John Wiley & Sons, vol. 85(4), pages 1058-1082, April.
    5. Dingde Xu & Enlai Liu & Xuxi Wang & Hong Tang & Shaoquan Liu, 2018. "Rural Households’ Livelihood Capital, Risk Perception, and Willingness to Purchase Earthquake Disaster Insurance: Evidence from Southwestern China," IJERPH, MDPI, vol. 15(7), pages 1-19, June.
    6. Kalfin & Sukono & Sudradjat Supian & Mustafa Mamat, 2022. "Insurance as an Alternative for Sustainable Economic Recovery after Natural Disasters: A Systematic Literature Review," Sustainability, MDPI, vol. 14(7), pages 1-18, April.
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    9. Vladimir M. Cvetković & Giulia Roder & Adem Öcal & Paolo Tarolli & Slavoljub Dragićević, 2018. "The Role of Gender in Preparedness and Response Behaviors towards Flood Risk in Serbia," IJERPH, MDPI, vol. 15(12), pages 1-21, December.
    10. Emileva, Begaiym & Kuhn, Lena & Bobojonov, Ihtiyor & Glauben, Thomas, 2023. "The role of smartphone-based weather information acquisition on climate change perception accuracy: Cross-country evidence from Kyrgyzstan, Mongolia and Uzbekistan," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 41, pages 1-1.
    11. Jennifer Oetzel & Chang Hoon Oh, 2021. "A storm is brewing: Antecedents of disaster preparation in risk prone locations," Strategic Management Journal, Wiley Blackwell, vol. 42(8), pages 1545-1570, August.
    12. Raymond J. Burby, 2006. "Hurricane Katrina and the Paradoxes of Government Disaster Policy: Bringing About Wise Governmental Decisions for Hazardous Areas," The ANNALS of the American Academy of Political and Social Science, , vol. 604(1), pages 171-191, March.

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