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Modelling risk adaptation and mitigation behaviour under different climate change scenarios

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  • Roy Brouwer
  • Marije Schaafsma

Abstract

The main objective of this study is to simulate household choice behavior under varying climate change scenarios using choice experiments. Economic welfare measures are derived for society’s willingness to pay (WTP) to reduce climate change induced flood risks through private insurance and willingness to accept compensation (WTAC) for controlled flooding under varying future risk exposure levels. Material flood damage and loss of life are covered in the insurance policy experiment, while the WTAC experiment also captures the economic value of immaterial flood damage such as feelings of discomfort, fear and social disruption. The results show that WTP and WTAC are substantial, suggesting a more prominent role of external social damage costs in cost-benefit analysis of climate change and flood mitigation policies. Copyright The Author(s) 2013

Suggested Citation

  • Roy Brouwer & Marije Schaafsma, 2013. "Modelling risk adaptation and mitigation behaviour under different climate change scenarios," Climatic Change, Springer, vol. 117(1), pages 11-29, March.
    • Handle: RePEc:spr:climat:v:117:y:2013:i:1:p:11-29
    DOI: 10.1007/s10584-012-0534-1
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    Cited by:

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    2. Achtnicht Martin & Osberghaus Daniel, 2019. "The Demand for Index-Based Flood Insurance in a High-Income Country," German Economic Review, De Gruyter, vol. 20(2), pages 217-242, May.
    3. Torres, Cati & Faccioli, Michela & Riera Font, Antoni, 2017. "Waiting or acting now? The effect on willingness-to-pay of delivering inherent uncertainty information in choice experiments," Ecological Economics, Elsevier, vol. 131(C), pages 231-240.
    4. Paul Hudson & W. J. Wouter Botzen & Jennifer Poussin & Jeroen C. J. H. Aerts, 2019. "Impacts of Flooding and Flood Preparedness on Subjective Well-Being: A Monetisation of the Tangible and Intangible Impacts," Journal of Happiness Studies, Springer, vol. 20(2), pages 665-682, February.
    5. Wang, Chen & Sun, Jiayi & Russell, Roddy & Daziano, Ricardo A., 2018. "Analyzing willingness to improve the resilience of New York City's transportation system," Transport Policy, Elsevier, vol. 69(C), pages 10-19.
    6. Thijs Dekker & Paul Koster & Roy Brouwer, 2014. "Changing with the Tide: Semiparametric Estimation of Preference Dynamics," Land Economics, University of Wisconsin Press, vol. 90(4), pages 717-745.
    7. Bujosa, Angel & Torres, Cati & Riera, Antoni, 2018. "Framing Decisions in Uncertain Scenarios: An Analysis of Tourist Preferences in the Face of Global Warming," Ecological Economics, Elsevier, vol. 148(C), pages 36-42.
    8. Alló, Maria & Loureiro, Maria L., 2014. "The role of social norms on preferences towards climate change policies: A meta-analysis," Energy Policy, Elsevier, vol. 73(C), pages 563-574.
    9. Alejandra R. Enríquez & Angel Bujosa Bestard, 2020. "Measuring the economic impact of climate-induced environmental changes on sun-and-beach tourism," Climatic Change, Springer, vol. 160(2), pages 203-217, May.
    10. Fabio Zagonari, 2013. "Implementing a trans-boundary flood risk management plan: a method for determining willingness to cooperate and case study for the Scheldt estuary," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 66(2), pages 1101-1133, March.
    11. Toledo-Gallegos, Valeria M. & My, Nguyen H.D. & Tuan, Tran Huu & Börger, Tobias, 2022. "Valuing ecosystem services and disservices of blue/green infrastructure. Evidence from a choice experiment in Vietnam," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 114-128.
    12. Mark J. Koetse & Roy Brouwer, 2016. "Reference Dependence Effects on WTA and WTP Value Functions and Their Disparity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(4), pages 723-745, December.
    13. Pablo Aznar-Crespo & Antonio Aledo & Joaquín Melgarejo-Moreno & Arturo Vallejos-Romero, 2021. "Adapting Social Impact Assessment to Flood Risk Management," Sustainability, MDPI, vol. 13(6), pages 1-27, March.
    14. Dougherty, John P. & Flatnes, Jon Einar & Gallenstein, Richard A. & Miranda, Mario J. & Sam, Abdoul G., 2020. "Climate change and index insurance demand: Evidence from a framed field experiment in Tanzania," Journal of Economic Behavior & Organization, Elsevier, vol. 175(C), pages 155-184.
    15. Dasgupta, Susmita & Wheeler, David & Bandyopadhyay, Sunando & Ghosh, Santadas & Roy, Utpal, 2022. "Coastal dilemma: Climate change, public assistance and population displacement," World Development, Elsevier, vol. 150(C).
    16. Markus Glatt & Roy Brouwer & Ivana Logar, 2019. "Combining Risk Attitudes in a Lottery Game and Flood Risk Protection Decisions in a Discrete Choice Experiment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(4), pages 1533-1562, December.
    17. Ryffel, Andrea Nathalie & Rid, Wolfgang & Grêt-Regamey, Adrienne, 2014. "Land use trade-offs for flood protection: A choice experiment with visualizations," Ecosystem Services, Elsevier, vol. 10(C), pages 111-123.
    18. Dong Wang & Rachel A. Davidson & Joseph E. Trainor & Linda K. Nozick & Jamie Kruse, 2017. "Homeowner purchase of insurance for hurricane-induced wind and flood damage," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 88(1), pages 221-245, August.
    19. James I. Price & Patrick R. Lloyd-Smith & Diane P. Dupont & Wiktor L. Adamowicz, 2019. "Floods and Water Service Disruptions: Eliciting Willingness-to-Pay for Public Utility Pricing and Infrastructure Decisions," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 1-20, April.

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