IDEAS home Printed from https://ideas.repec.org/a/cup/bpubpo/v5y2021i3p318-332_3.html
   My bibliography  Save this article

Improving the National Flood Insurance Program

Author

Listed:
  • KUNREUTHER, HOWARD

Abstract

This paper highlights factors that need to be considered for improving the National Flood Insurance Program in the USA to address the biases that lead individuals to not protect themselves against low-probability, high-consequence flood events. The errors that individuals exhibit in deciding not to purchase insurance or invest in loss reduction measures prior to a disaster can be traced to the effects of six biases: myopia, amnesia, optimism, inertia, simplification and herding. Along with two guiding principles for insurance, a behavioral risk audit can assist in designing a strategy using concepts from choice architecture coupled with economic incentives to encourage property owners in hazard-prone areas to purchase insurance and invest in cost-effective adaptation measures to protect themselves against future disaster losses.

Suggested Citation

  • Kunreuther, Howard, 2021. "Improving the National Flood Insurance Program," Behavioural Public Policy, Cambridge University Press, vol. 5(3), pages 318-332, July.
    • Handle: RePEc:cup:bpubpo:v:5:y:2021:i:3:p:318-332_3
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S2398063X1800026X/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christoph Duden & Oliver Mußhoff & Frank Offermann, 2023. "Dealing with low‐probability shocks: The role of selected heuristics in farmers’ risk management decisions," Agricultural Economics, International Association of Agricultural Economists, vol. 54(3), pages 382-399, May.
    2. Mankaï, Selim & Marchand, Sébastien & Le, Ngoc Ha, 2024. "Valuing insurance against small probability risks: A meta-analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 109(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:bpubpo:v:5:y:2021:i:3:p:318-332_3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/bpp .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.