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Determinants of insurance demand against forest fire risk: an empirical analysis of French private forest owners

Author

Listed:
  • Marielle Brunette

    (Laboratoire d'Economie Forestière, INRA - AgroParisTech)

  • Stéphane Couture

    (Unité de mathématiques et informatique appliquées de Toulouse, INRA)

  • Serge Garcia

    (Laboratoire d'Economie Forestière, INRA - AgroParisTech)

Abstract

In this article, we estimate the demand of French private forest owners for forest insurance against fire risk. For this purpose, we combine experimental data and real-world data on forest owners’ characteristics. Our econometric approach consists in estimating both insurance participation and coverage-level decisions, while accounting for sample selection issues. Our results clearly show that the type of public assistance is a significant determinant in the insurance decision. Other attributes of the experiment such as the expected loss only explain coverage-level decisions, whereas the existence of an ambiguity concerning the probability of fire occurrence positively affects both insurance participation and coverage-level decisions.

Suggested Citation

  • Marielle Brunette & Stéphane Couture & Serge Garcia, 2014. "Determinants of insurance demand against forest fire risk: an empirical analysis of French private forest owners," Working Papers - Cahiers du LEF 2014-12, Laboratoire d'Economie Forestiere, AgroParisTech-INRA, revised Dec 2014.
    • Handle: RePEc:lef:wpaper:2014-12
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    File URL: http://www6.nancy.inra.fr/lef/Cahiers-du-LEF/2014/2014-12
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    Cited by:

    1. M. Brunette & S. Couture & J. Foncel & S. Garcia, 2020. "The decision to insure against forest fire risk: an econometric analysis combining hypothetical real data," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 45(1), pages 111-133, January.
    2. Marielle Brunette & Stéphane Couture & Jérôme Foncel & Serge S. Garcia, 2017. "Insurance decision against forest fire : An econometric analysis combining experimental and real data," Post-Print hal-02785187, HAL.

    More about this item

    Keywords

    Insurance; Forest; Fire risk; Ambiguity; Public compensation; Experimental data;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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