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Heterogeneity of demand for forestry insurance: Explanations based on a comparison between France and China

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Listed:
  • Yafei Wang
  • Marielle Brunette
  • Fanny Claise

Abstract

Forest insurance is a relevant tool to consider in a context of increasing natural hazard due to climate change. However, forest insurance is highly heterogeneous from one country to another, with some countries having large insured forest areas and others not. In this article, we attempt to identify the reasons for this heterogeneity. To do so, we compare the forest insurance schemes of two countries, France and China. France is characterized by a low level of insured forest area, while China is the opposite. We identify differences and similarities between the two schemes that can explain the heterogeneity in terms of insured area. In particular, we highlight the different role of the government in these schemes. Finally, we present some innovative insurance products likely to encourage insurance adoption.

Suggested Citation

  • Yafei Wang & Marielle Brunette & Fanny Claise, 2025. "Heterogeneity of demand for forestry insurance: Explanations based on a comparison between France and China," Working Papers of BETA 2025-14, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    • Handle: RePEc:ulp:sbbeta:2025-14
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    File URL: http://beta.u-strasbg.fr/WP/2025/2025-14.pdf
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    References listed on IDEAS

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    1. Browne, Mark J & Hoyt, Robert E, 2000. "The Demand for Flood Insurance: Empirical Evidence," Journal of Risk and Uncertainty, Springer, vol. 20(3), pages 291-306, May.
    2. Patrice Loisel & Marielle Brunette & Stéphane Couture, 2020. "Insurance and Forest Rotation Decisions Under Storm Risk," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(2), pages 347-367, July.
    3. Marielle Brunette & Stéphane Couture, 2023. "Forest Insurance for Natural Events: An Overview by Economists," Post-Print hal-03998602, HAL.
    4. Feng, Xin & Dai, Yongwu, 2019. "An innovative type of forest insurance in China based on the robust approach," Forest Policy and Economics, Elsevier, vol. 104(C), pages 23-32.
    5. Sauter, Philipp A. & Mußhoff, Oliver & Möhring, Bernhard & Wilhelm, Stefan, 2016. "Faustmann vs. real options theory – An experimental investigation of foresters’ harvesting decisions," Journal of Forest Economics, Elsevier, vol. 24(C), pages 1-20.
    6. Brunette, Marielle & Couture, Stéphane, 2008. "Public compensation for windstorm damage reduces incentives for risk management investments," Forest Policy and Economics, Elsevier, vol. 10(7-8), pages 491-499, October.
    7. Marielle Brunette & Laure Cabantous & Stéphane Couture & Anne Stenger, 2013. "The impact of governmental assistance on insurance demand under ambiguity: a theoretical model and an experimental test," Theory and Decision, Springer, vol. 75(2), pages 153-174, August.
    8. Sandrine Brèteau-Amores & Rasoul Yousefpour & Marc Hanewinkel & Mathieu Fortin, 2023. "Forest adaptation strategies to reconcile timber production and carbon sequestration objectives under multiple risks of extreme drought and windstorm events," Post-Print hal-04523058, HAL.
    9. Brèteau-Amores, Sandrine & Yousefpour, Rasoul & Hanewinkel, Marc & Fortin, Mathieu, 2023. "Forest adaptation strategies to reconcile timber production and carbon sequestration objectives under multiple risks of extreme drought and windstorm events," Ecological Economics, Elsevier, vol. 212(C).
    10. Ye Song & Hongjun Peng, 2019. "Strategies of Forestry Carbon Sink under Forest Insurance and Subsidies," Sustainability, MDPI, vol. 11(17), pages 1-13, August.
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • 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
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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