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Monetary Valuation Of Insurance Against Flood Risk Under Climate Change

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  • W. J. Wouter Botzen
  • Jeroen C. J. M. Van Den Bergh

Abstract

Climate change is projected to increase the risk of natural disasters, such as floods and storms, in certain regions. This is likely to raise the demand for natural disaster insurance. We present a stated preference survey using choice modeling with mixed logit estimation methods in order to examine the effects of climate change and the availability of government compensation on the demand for flood insurance by Dutch homeowners. Currently, no private insurance against flood damage is offered in the Netherlands. The results indicate that there are opportunities for the development of a flood insurance market.

Suggested Citation

  • W. J. Wouter Botzen & Jeroen C. J. M. Van Den Bergh, 2012. "Monetary Valuation Of Insurance Against Flood Risk Under Climate Change," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(3), pages 1005-1026, August.
    • Handle: RePEc:wly:iecrev:v:53:y:2012:i:3:p:1005-1026
    DOI: 10.1111/j.1468-2354.2012.00709.x
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