Preferences, behavior, and welfare outcomes against disasters: a review

This chapter reviews existing studies on the nexus among disaster exposure, changes in individual and social responses, behavioral responses, and welfare consequences. This review is based on a conceptual framework integrating components speciï¬ c to natural disasters with changes in individual and social preferences and ex-ante risk management/ex-post risk coping behaviors that have been shaped by asset holdings comprising physical, financial, human, and social capitals. While the literature on these elements is already rich, the research findings on the relationship between disaster exposure and preferences (individual and social) are still mixed and inconclusive. On the policy side, in the last few decades, countries and economies around the globe have achieved significant progress in the design and implementation of strategies for the abatement of risks stemming from natural hazards. Yet, several real-world challenges still remain. First, in order to overcome the financial challenge in building disaster resilience, governments, international organizations, and other stakeholders around the world should continue to promote spending on disaster prevention and preparedness instead of disaster response. Second, it would be crucial to increase the availability and accessibility of formal insurance mechanisms, especially in the developing countries, in order to lower the disutility of adopting costly risk-coping actions. Third, it is imperative to engage the community in planning for disaster reduction, response, and recovery.