Wind Insurance and Mitigation in the Coastal Zone

Land Economics 91(2): 272-95, 2016

Posted: 6 Nov 2013 Last revised: 19 May 2018

See all articles by Daniel R. Petrolia

Daniel R. Petrolia

Mississippi State University - Department of Agricultural Economics

Joonghyun Hwang

Mississippi State University - Department of Agricultural Economics

Craig E. Landry

University of Georgia - Department of Agricultural & Applied Economics

Keith H. Coble

Mississippi State University - Department of Agricultural Economics

Date Written: 2015

Abstract

This paper presents the only study analyzing the decision to purchase wind coverage for individuals whose standard homeowner’s policy excludes wind, and one o f very few analyses o f the decision to undertake wind mitigation measures. Because these two decisions are closely related, a simultaneous mixed-process approach is used that allows for correlated disturbances across prohit (insurance) and tobit (mitigation) equations. Results indicate a positive correlation between errors of the insurance and mitigation models; conditioning on covariates, households that hold wind insurance tend to engage in greater levels o f wind mitigation.

Keywords: mitigation, risk preferences, risk perceptions, wind insurance, wind pool

JEL Classification: C35,Q54

Suggested Citation

Petrolia, Daniel R. and Hwang, Joonghyun and Landry, Craig and Coble, Keith H., Wind Insurance and Mitigation in the Coastal Zone (2015). Land Economics 91(2): 272-95, 2016. Available at SSRN: https://ssrn.com/abstract=2350361 or http://dx.doi.org/10.2139/ssrn.2350361

Daniel R. Petrolia

Mississippi State University - Department of Agricultural Economics ( email )

Box 5187
Mississippi State, MS 39762
United States

Joonghyun Hwang

Mississippi State University - Department of Agricultural Economics ( email )

Box 5187
Mississippi State, MS 39762
United States

Craig Landry (Contact Author)

University of Georgia - Department of Agricultural & Applied Economics ( email )

Athens, GA 30602-7509
United States

Keith H. Coble

Mississippi State University - Department of Agricultural Economics ( email )

Box 5187
Mississippi State, MS 39762
United States

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