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Disasters and health insurance: Evidence from Louisiana

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  • Barnes, Stephen
  • Joshi, Swarup
  • Terrell, Dek

Abstract

Natural disasters can have important impacts on an individual’s decision to purchase insurance. The literature primarily focuses on the impact of natural disasters on the decision to buy flood or property insurance policies that would compensate the policyholder during a similar event. This paper explores the impact of a series of disasters (hurricanes and floods) striking the state of Louisiana in the decision to purchase health insurance. Using the staggered difference-in-differences method, we find that health insurance rates rise for those impacted by natural disasters. We also find a positive relationship between disaster aid (at the parish level) and health insurance take-up rates. The study confirms the economic theory of risk perception and insurance demand, while also highlighting the role of governance and institutions during crises (such as natural disasters) by providing evidence that fiscal policy disaster relief can have a second-order effect on health insurance take-up rates.

Suggested Citation

  • Barnes, Stephen & Joshi, Swarup & Terrell, Dek, 2023. "Disasters and health insurance: Evidence from Louisiana," Economic Modelling, Elsevier, vol. 128(C).
    • Handle: RePEc:eee:ecmode:v:128:y:2023:i:c:s0264999323003280
    DOI: 10.1016/j.econmod.2023.106516
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    More about this item

    Keywords

    Health insurance; Crisis; Governance; Risk;
    All these keywords.

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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