Investigators at Vrije University Detail Findings in Risk Management (Integrating Household Risk Mitigation Behavior in Flood Risk Analysis: An…

Investigators at Vrije University Detail Findings in Risk Management (Integrating Household Risk Mitigation Behavior in Flood Risk Analysis: An Agent-Based Model Approach)

By a News Reporter-Staff News Editor at Insurance Weekly News -- Investigators publish new report on Risk Management. According to news reporting originating in Amsterdam, Netherlands, by VerticalNews journalists, research stated, "Recent studies showed that climate change and socioeconomic trends are expected to increase flood risks in many regions. However, in these studies, human behavior is commonly assumed to be constant, which neglects interaction and feedback loops between human and environmental systems."

The news reporters obtained a quote from the research from Vrije University, "This neglect of human adaptation leads to a misrepresentation of flood risk. This article presents an agent-based model that incorporates human decision making in flood risk analysis. In particular, household investments in loss-reducing measures are examined under three economic decision models: (1) expected utility theory, which is the traditional economic model of rational agents; (2) prospect theory, which takes account of bounded rationality; and (3) a prospect theory model, which accounts for changing risk perceptions and social interactions through a process of Bayesian updating. We show that neglecting human behavior in flood risk assessment studies can result in a considerable misestimation of future flood risk, which is in our case study an overestimation of a factor two. Furthermore, we show how behavior models can support flood risk analysis under different behavioral assumptions, illustrating the need to include the dynamic adaptive human behavior of, for instance, households, insurers, and governments."

According to the news reporters, the research concluded: "The method presented here provides a solid basis for exploring human behavior and the resulting flood risk with respect to low-probability/high-impact risks."

For more information on this research see: Integrating Household Risk Mitigation Behavior in Flood Risk Analysis: An Agent-Based Model Approach. Risk Analysis, 2017;37(10):1977-1992. Risk Analysis can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA. (Wiley-Blackwell - www.wiley.com/; Risk Analysis - onlinelibrary.wiley.com/journal/10.1111/(ISSN)1539-6924)

Our news correspondents report that additional information may be obtained by contacting T. Haer, Vrije Universiteit Amsterdam, Inst Environm Studies IVM, Amsterdam, Netherlands. Additional authors for this research include W.J.W. Botzen, H. de Moel and J. Aerts.

Keywords for this news article include: Amsterdam, Netherlands, Europe, Risk Management, Vrije University.

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