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Public in-kind relief and private self-insurance

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  • Goeschl, Timo
  • Managi, Shunsuke

Abstract

In the wake of several high-profile natural disasters, crowding effects between public relief and private investments in disaster preparedness have recently attracted renewed attention. We examine how non-hypothetical self-insurance behavior by households responds to variations in public investments in relief capabilities based on a large disaster preparedness survey (n = 19,071) conducted in Japan in 2012. The preparedness measure used is emergency drinking water storage, defining a setting in which (i) government provides in-kind, rather than cash, relief and (ii) the crowding effect observed is more apt to be total, rather than partial. In contrast to much of the literature studying crowding effects of cash relief, there is little evidence for crowding out in emergency drinking water, with an upper bound of 2 percent at the intensive margin.

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  • Goeschl, Timo & Managi, Shunsuke, 2017. "Public in-kind relief and private self-insurance," Working Papers 0633, University of Heidelberg, Department of Economics.
  • Handle: RePEc:awi:wpaper:0633
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    Cited by:

    1. Mook Bangalore & Andrew Smith & Ted Veldkamp, 2019. "Exposure to Floods, Climate Change, and Poverty in Vietnam," Economics of Disasters and Climate Change, Springer, vol. 3(1), pages 79-99, April.

    More about this item

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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