Research Data from Vrije Universiteit Amsterdam Update Understanding of Economic Behavior and Organization (Behavioral Motivations for Self-insurance Under Different Disaster Risk Insurance Schemes)

2021 FEB 25 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Researchers detail new data in Economics - Economic Behavior and Organization. According to news reporting out of Amsterdam, Netherlands, by NewsRx editors, research stated, “This paper presents a lab-in-the-field experiment with 2111 Dutch homeowners in flood plain areas to examine the impacts of financial incentives and behavioral motivations for self-insurance under different flood insurance schemes. We experimentally varied the insurance type (mandatory public versus voluntary private) and the availability of a premium discount incentive for investing in flood damage mitigation measures.”

Financial support for this research came from Netherlands Organization for Scientific Research (NWO).

Our news journalists obtained a quote from the research from Vrije Universiteit Amsterdam, “This set-up allowed us to examine the existence of moral hazard, advantageous selection and the behavioral motivations of individual agents who face these different insurance types, without the selection bias that makes a causal inference from survey studies problematic. The main results show that a premium discount can increase investments in self-insurance under both private and public insurance. Moreover, we find no support for moral hazard in our natural disaster insurance market, but we do find a substantial share of cautious people who invest both in private insurance as well as in self-insurance, indicating advantageous selection.”

According to the news editors, the research concluded: “The results have implications for the design of insurance schemes to cope with increasing natural disaster risks.”

This research has been peer-reviewed.

For more information on this research see: Behavioral Motivations for Self-insurance Under Different Disaster Risk Insurance Schemes. Journal of Economic Behavior & Organization, 2020;180:967-991. Journal of Economic Behavior & Organization can be contacted at: Elsevier, Radarweg 29, 1043 Nx Amsterdam, Netherlands. (Elsevier - www.elsevier.com; Journal of Economic Behavior & Organization - http://www.journals.elsevier.com/journal-of-economic-behavior-and-organization/)

Our news journalists report that additional information may be obtained by contacting Jantsje M. Mol, Vrije Universiteit Amsterdam, Inst Environm Studies Ivm, Amsterdam, Netherlands. Additional authors for this research include W. J. Wouter Botzen and Julia E. Blasch.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.jebo.2018.12.007. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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