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Wind Insurance and Mitigation in the Coastal Zone

Author

Listed:
  • Petrolia, Daniel R.
  • Hwang, Joonghyun
  • Landry, Craig E.
  • Coble, Keith H.

Abstract

This paper presents one of very few analyses of the decision to undertake wind mitigation measures, and the only study to analyze the decision to purchase wind coverage for individuals whose standard homeowner’s policy excludes wind. A simultaneous mixed-process approach is used that allows for correlated disturbances across probit (insurance) and tobit (mitigation) equations. Results indicate a positive correlation between the errors of the insurance and mitigation models; conditioning on covariates, households that hold wind insurance tend to engage in greater levels of wind mitigation. Thus, the data imply two types – households that purchase insurance and mitigate and others that do neither.

Suggested Citation

  • Petrolia, Daniel R. & Hwang, Joonghyun & Landry, Craig E. & Coble, Keith H., 2013. "Wind Insurance and Mitigation in the Coastal Zone," Working Papers 160462, Mississippi State University, Department of Agricultural Economics.
  • Handle: RePEc:ags:misswp:160462
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    References listed on IDEAS

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    1. Teisl, Mario F. & Roe, Brian E., 2010. "Consumer willingness-to-pay to reduce the probability of retail foodborne pathogen contamination," Food Policy, Elsevier, vol. 35(6), pages 521-530, December.
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    8. Daniel R. Petrolia & Craig E. Landry & Keith H. Coble, 2013. "Risk Preferences, Risk Perceptions, and Flood Insurance," Land Economics, University of Wisconsin Press, vol. 89(2), pages 227-245.
    9. David Roodman, 2011. "Fitting fully observed recursive mixed-process models with cmp," Stata Journal, StataCorp LP, vol. 11(2), pages 159-206, June.
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    Cited by:

    1. repec:pal:gpprii:v:42:y:2017:i:2:d:10.1057_s41288-016-0039-7 is not listed on IDEAS
    2. Andor, Mark & Osberghaus, Daniel & Simora, Michael, 2017. "Natural disasters and governmental aid: Is there a charity hazard?," ZEW Discussion Papers 17-065, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    3. Krah, Kwabena & Petrolia, Daniel & Coble, Keith & Williams, Angelica & Harri, Ardian, 2015. "Producer Preferences for Contracts on a Risky Bioenergy Crop," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196994, Southern Agricultural Economics Association.
    4. repec:spr:nathaz:v:88:y:2017:i:1:d:10.1007_s11069-017-2863-x is not listed on IDEAS
    5. Petrolia, Daniel R., 2016. "Risk preferences, risk perceptions, and risky food," Food Policy, Elsevier, vol. 64(C), pages 37-48.
    6. Osberghaus, Daniel, 2015. "The determinants of private flood mitigation measures in Germany — Evidence from a nationwide survey," Ecological Economics, Elsevier, vol. 110(C), pages 36-50.
    7. repec:spr:ediscc:v:1:y:2017:i:3:d:10.1007_s41885-017-0016-z is not listed on IDEAS
    8. repec:kap:geneva:v:42:y:2017:i:2:d:10.1057_s10713-017-0021-8 is not listed on IDEAS
    9. Williams, Angelica & Coble, Keith H. & Williams, Brian & Dicks, Michael & Knippenberg, Ross, 2016. "Consumer Preferences for Pet Health Insurance," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230144, Southern Agricultural Economics Association.

    More about this item

    Keywords

    mitigation; risk preferences; risk perceptions; wind insurance; wind pool; Consumer/Household Economics; Environmental Economics and Policy;

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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