How do floods affect insurance demand? Evidence from flood insurance take-up in Japan

Jie Shao, Akio Hoshino, Satoshi Nakaide*


研究成果: Article査読


This study examines the hypothetical impact of floods on people's flood insurance purchase decisions, and how this impact may differ among people with different socioeconomic, geographic, and financial literacy characteristics. We find a significant yet short-lived (1-year) impact of floods on people's demand for flood insurance at an ecological level (prefectures). Different aspects of flood damage have different impacts on flood insurance take-up, with human casualties having the greatest impact on people's perception of flood risk. We also find that groups with different socioeconomic characteristics, such as age, education, and insurance agent density, react differently to floods concerning insurance purchases. We confirm a positive relationship between objective risk exposure and people's perception of the flood experience. Finally, an analysis of the Financial Literacy Survey demonstrates the impact of three cognitive biases (loss aversion, myopic, herding) on flood insurance take-up. These findings provide empirical evidence for various psychological and behavioral theories, and important policy references for countries aiming to develop flood insurance in the future.

ジャーナルInternational Journal of Disaster Risk Reduction
出版ステータスPublished - 2022 12月

ASJC Scopus subject areas

  • 建築および建設
  • 地盤工学および土木地質学
  • 安全研究
  • 地質学


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