Study Data from Harvard University Update Understanding of Environmental Economics (Voluntary Purchases and Adverse Selection In the Market for Flood Insurance): Economics – Environmental Economics

2021 NOV 05 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Investigators publish new report on Economics - Environmental Economics. According to news reporting originating from Cambridge, Massachusetts, by NewsRx correspondents, research stated, “Flood-related events are the most damaging natural hazard in the United States, yet many households at risk do not have flood insurance.”

Financial support for this research came from United States Department of Homeland Security (DHS).

Our news editors obtained a quote from the research from Harvard University, “Using detailed policy-and claims-level data from the National Flood Insurance Program (NFIP), we conduct a holistic analysis of the market for publicly provided flood insurance in the U.S., focusing on not only high-risk areas subject to an incomplete mandate requiring the purchase of insurance, but also lower risk areas where no such mandate exists. We are able to better understand determinants of demand for insurance in a setting with voluntary purchase and low take-up and therefore provide a more complete analysis of the market for flood insurance in the U.S. than previous work.”

According to the news editors, the research concluded: “In addition to exploring correlates of demand for flood insurance, this paper provides quasi-experimental estimates of households’ willingness-to-pay for flood insurance and finds strong evidence to suggest the NFIP failing to utilize full information on flood risk leads to adverse selection in the program.”

This research has been peer-reviewed.

For more information on this research see: Voluntary Purchases and Adverse Selection In the Market for Flood Insurance. Journal of Environmental Economics and Management, 2021;110. Journal of Environmental Economics and Management can be contacted at: Academic Press Inc Elsevier Science, 525 B St, Ste 1900, San Diego, CA 92101-4495, USA. (Elsevier - www.elsevier.com; Journal of Environmental Economics and Management - http://www.journals.elsevier.com/journal-of-environmental-economics-and-management/)

The news editors report that additional information may be obtained by contacting Jacob T. Bradt, Harvard University, John F. Kennedy School of Government, 79 John F Kennedy St, Cambridge, MA 02138, United States. Additional authors for this research include Carolyn Kousky and Oliver E. J. Wing.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.jeem.2021.102515. 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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