Risk reduction in compulsory disaster insurance: Experimental evidence on moral hazard and financial incentives
In: Journal of behavioral and experimental economics, Band 84, S. 101500
ISSN: 2214-8043
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In: Journal of behavioral and experimental economics, Band 84, S. 101500
ISSN: 2214-8043
In: Risk analysis: an international journal, Band 40, Heft 7, S. 1450-1468
ISSN: 1539-6924
AbstractFlooding is one of the most significant natural disasters worldwide. Nevertheless, voluntary take‐up of individual damage reduction measures is low. A potential explanation is that flood risk perceptions of individual homeowners are below objective estimates of flood risk, which may imply that they underestimate the flood risk and the damage that can be avoided by damage reduction measures. The aim of this article is to assess possible flood risk misperceptions of floodplain residents in the Netherlands, and to offer insights into factors that are related with under‐ or overestimation of perceived flood risk. We analyzed survey data of 1,848 homeowners in the Dutch river delta and examine how perceptions of flood probability and damage relate to objective risk assessments, such as safety standards of dikes, as well as heuristics, including the availability heuristic and the affect heuristic. Results show that many Dutch floodplain inhabitants significantly overestimate the probability, but underestimate the maximum expected water level of a flood. We further observe that many respondents apply the availability heuristic.
In: Behavioural public policy: BPP, Band 8, Heft 1, S. 121-153
ISSN: 2398-0648
AbstractNudges based on social norms (norm-nudges) can be compelling behavioral interventions compared with traditional interventions such as taxes and regulations, but they do not work in all circumstances. We tested two empirical norm-nudge frames in an online experiment on taking measures for flood preparedness with large samples of homeowners (N = 1805) in two European countries, to evaluate the possible interactions between norm-nudge effectiveness, individual characteristics, and intercultural differences. We contrasted these norm-nudge treatments with a control and norm-focusing treatment by asking respondents to express their beliefs about what other respondents would do before making a decision relevant to their own payoff. We find no evidence of a treatment effect, suggesting that our social norm-nudges do not affect flood preparedness in the context of a flood risk investment game.