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Insurance Demand Against Natural Hazards by Forest Owners: A French Case Study Using Discrete Choice Modeling

Author

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  • Fanny Claise
  • Marielle Brunette

Abstract

Natural events pose a real threat to forests around the world. Insurance contracts can help protect forest owners against these damaging events. However, there is considerable heterogeneity in terms of insurance adoption across countries. In France, for instance, the adoption rate is extremely low. In this article, we attempt to identify the characteristics of insurance contracts that influence forest owners’ demand for insurance against natural events. To this end, we employed a Discrete Choice Experiment methodology involving hypothetical forest insurance scenarios that varied according to the characteristics of the insurance contract such as the hazard(s) covered, the level of deductible, the duration, and the annual cost. The results, based on 317 responses from French private forest owners, demonstrate that some of the tested characteristics had a significant impact. Notably, forest owners were not willing to pay for storm insurance in addition to fire insurance. Conversely, they were willing to pay for insurance against the package including all hazards: fire, storm, drought and pathogens.

Suggested Citation

  • Fanny Claise & Marielle Brunette, 2025. "Insurance Demand Against Natural Hazards by Forest Owners: A French Case Study Using Discrete Choice Modeling," Working Papers of BETA 2025-42, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    • Handle: RePEc:ulp:sbbeta:2025-42
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    File URL: http://beta.u-strasbg.fr/WP/2025/2025-42.pdf
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

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