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Natural disasters, land-use, and insurance

Author

Listed:
  • Bertrand Villeneuve

    (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine)

  • Céline Grislain-Letrémy

    (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper addresses the urbanization of areas exposed to natural disasters and studies its dependency on land-use and insurance policies. In practice, we observe simple policies, consisting of a prohibited red zone and a zone without insurance tariff differentiation. Even if there are fixed damages per dwelling, the red-zone policy is relatively efficient; it implements the optimal land-use if the losses are proportional to the surface used. The main results are on the effects redefining the optimal red zone as the climate or the population changes. We expose plausible cases in which the red zone grows with a growing population.

Suggested Citation

  • Bertrand Villeneuve & Céline Grislain-Letrémy, 2019. "Natural disasters, land-use, and insurance," Post-Print hal-02281595, HAL.
  • Handle: RePEc:hal:journl:hal-02281595
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-02281595
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    References listed on IDEAS

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    More about this item

    Keywords

    Natural disasters; Insurance; Land-use; regulation; Climate change;

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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