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What is the Economics of Wind Hazard Mitigation?

Author

Listed:
  • Scott Pataya

    (National Wind Institute, Texas Tech University, Lubbock, Texas, USA)

  • Liang Daan

    (National Wind Institute, Texas Tech University, Lubbock, Texas, USA)

Abstract

Tornadoes, hurricanes, and other extreme winds cause deaths, injuries, and millions, if not billions, of dollars in damages every year in the United States. Mitigation is necessary to reduce the loss of life, anxiety and suffering, and economic losses. But how much are people willing to invest in their peace of mind? Policy makers typically use the range of $1 million to $10 million per life saved to determine whether a policy that would save lives should be implemented. Individuals have shown that they are willing to pay more for homes with upgrades for mitigation and safety even though they would have no insurance incentive and it is likely that the added cost only affords them peace of mind.

Suggested Citation

  • Scott Pataya & Liang Daan, 2016. "What is the Economics of Wind Hazard Mitigation?," Journal of Business Valuation and Economic Loss Analysis, De Gruyter, vol. 11(1), pages 25-29, June.
    • Handle: RePEc:bpj:jbvela:v:11:y:2016:i:1:p:25-29:n:4
    DOI: 10.1515/jbvela-2015-0012
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    References listed on IDEAS

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    1. Kevin M. Simmons & Jamie Brown Kruse & Douglas A. Smith, 2002. "Valuing Mitigation: Real Estate Market Response to Hurricane Loss Reduction Measures," Southern Economic Journal, Southern Economic Association, vol. 68(3), pages 660-671, January.
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