IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v180y2021ics0921800920307783.html
   My bibliography  Save this article

Determining the insurance value of ecosystems: A discrete choice study on natural hazard protection by forests

Author

Listed:
  • Unterberger, Christian
  • Olschewski, Roland

Abstract

Forest ecosystems provide multiple services. In mountainous regions, protection against gravitational hazards is of particular importance. By preventing soil erosion and functioning as natural barriers and buffers, forests protect the population and infrastructure against avalanches and rock falls. The higher the forests' capacity to regulate and withstand external disturbances and adverse effects the higher the insurance value they provide. To operationalize the insurance value approach and to integrate it into climate change adaptation and disaster risk management, information about supply and demand of this ecosystem service is required. While assessing the capacity of forests to provide protection services has been a longstanding research focus, knowledge about the population's demand for insurance services provided by forests is still lacking. Our study analyzes the preferences of beneficiaries of such services. We conducted a choice experiment in several Swiss municipalities exposed to avalanches and rock falls, accounting for different spatial and institutional contexts. We found that households are willing to pay a significant amount for forest management that enhances forests' insurance services and reduces natural hazard risks. The results help to inform decision making in natural hazard management, and represent a further step towards operationalizing the insurance value of ecosystems.

Suggested Citation

  • Unterberger, Christian & Olschewski, Roland, 2021. "Determining the insurance value of ecosystems: A discrete choice study on natural hazard protection by forests," Ecological Economics, Elsevier, vol. 180(C).
    • Handle: RePEc:eee:ecolec:v:180:y:2021:i:c:s0921800920307783
    DOI: 10.1016/j.ecolecon.2020.106866
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800920307783
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2020.106866?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Quaas, Martin & Baumgärtner, Stefan & De Lara, Michel, 2019. "Insurance value of natural capital," Ecological Economics, Elsevier, vol. 165(C), pages 1-1.
    2. Emmanuelle Augeraud-Véron & Giorgio Fabbri & Katheline Schubert, 2019. "The Value of Biodiversity as an Insurance Device," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(4), pages 1068-1081.
    3. Unterberger, Christian & Hudson, Paul & Botzen, W.J. Wouter & Schroeer, Katharina & Steininger, Karl W., 2019. "Future Public Sector Flood Risk and Risk Sharing Arrangements: An Assessment for Austria," Ecological Economics, Elsevier, vol. 156(C), pages 153-163.
    4. Paavola, Jouni & Primmer, Eeva, 2019. "Governing the Provision of Insurance Value From Ecosystems," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    5. R. Quentin Grafton & Luc Doyen & Christophe Béné & Edoardo Borgomeo & Kate Brooks & Long Chu & Graeme S. Cumming & John Dixon & Stephen Dovers & Dustin Garrick & Ariella Helfgott & Qiang Jiang & Pamel, 2019. "Realizing resilience for decision-making," Nature Sustainability, Nature, vol. 2(10), pages 907-913, October.
      • R. Quentin Grafton & Luc Doyen & Christophe Béné & Edoardo Borgomeo & Kate Brooks & Long Chu & Graeme S. Cumming & John Dixon & Stephen Dovers & Dustin Garrick & Ariella Helfgott & Qiang Jiang & Pamel, 2019. "Realizing resilience for decision-making," Post-Print hal-02733372, HAL.
    6. Sanko, Nobuhiro & Hess, Stephane & Dumont, Jeffrey & Daly, Andrew, 2014. "Contrasting imputation with a latent variable approach to dealing with missing income in choice models," Journal of choice modelling, Elsevier, vol. 12(C), pages 47-57.
    7. Hayek, F. A., 2012. "Hayek on Hayek," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226321202 edited by Kresge, Stephen & Wenar, Leif, December.
    8. Dallimer, Martin & Martin-Ortega, Julia & Rendon, Olivia & Afionis, Stavros & Bark, Rosalind & Gordon, Iain J. & Paavola, Jouni, 2020. "Taking stock of the empirical evidence on the insurance value of ecosystems," Ecological Economics, Elsevier, vol. 167(C).
    9. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David B. Huffman & Uwe Sunde, 2017. "Global Evidence on Economic Preferences," NBER Working Papers 23943, National Bureau of Economic Research, Inc.
    10. Brenden Jongman, 2018. "Effective adaptation to rising flood risk," Nature Communications, Nature, vol. 9(1), pages 1-3, December.
    11. Erik Brynjolfsson & Avinash Collis & Felix Eggers, 2019. "Using massive online choice experiments to measure changes in well-being," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 116(15), pages 7250-7255, April.
    12. Daniel R. Petrolia & Matthew G. Interis & Joonghyun Hwang, 2014. "America's Wetland? A National Survey of Willingness to Pay for Restoration of Louisiana's Coastal Wetlands," Marine Resource Economics, University of Chicago Press, vol. 29(1), pages 17-37.
    13. Bruno Locatelli & Charlotte Pavageau & Emilia Pramova & Monica Di Gregorio, 2015. "Integrating climate change mitigation and adaptation in agriculture and forestry: opportunities and trade‐offs," Wiley Interdisciplinary Reviews: Climate Change, John Wiley & Sons, vol. 6(6), pages 585-598, November.
    14. Armin Falk & Anke Becker & Thomas Dohmen & Benjamin Enke & David Huffman & Uwe Sunde, 2018. "Global Evidence on Economic Preferences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(4), pages 1645-1692.
    15. Robert J. Johnston & Kevin J. Boyle & Wiktor (Vic) Adamowicz & Jeff Bennett & Roy Brouwer & Trudy Ann Cameron & W. Michael Hanemann & Nick Hanley & Mandy Ryan & Riccardo Scarpa & Roger Tourangeau & Ch, 2017. "Contemporary Guidance for Stated Preference Studies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 319-405.
    16. Holly P. Jones & David G. Hole & Erika S. Zavaleta, 2012. "Harnessing nature to help people adapt to climate change," Nature Climate Change, Nature, vol. 2(7), pages 504-509, July.
    17. Emmanuelle Augeraud-Véron & Giorgio Fabbri & Katheline Schubert, 2019. "The Value of Biodiversity as an Insurance Device," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(4), pages 1068-1081.
    18. J. C. J. H. Aerts & W. J. Botzen & K. C. Clarke & S. L. Cutter & J. W. Hall & B. Merz & E. Michel-Kerjan & J. Mysiak & S. Surminski & H. Kunreuther, 2018. "Integrating human behaviour dynamics into flood disaster risk assessment," Nature Climate Change, Nature, vol. 8(3), pages 193-199, March.
    19. W. J. Wouter Botzen & Jeroen C. J. M. Van Den Bergh, 2012. "Monetary Valuation Of Insurance Against Flood Risk Under Climate Change," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(3), pages 1005-1026, August.
    20. Andrew Daly & Stephane Hess & Kenneth Train, 2012. "Assuring finite moments for willingness to pay in random coefficient models," Transportation, Springer, vol. 39(1), pages 19-31, January.
    21. Hess, Stephane & Palma, David, 2019. "Apollo: A flexible, powerful and customisable freeware package for choice model estimation and application," Journal of choice modelling, Elsevier, vol. 32(C), pages 1-1.
    22. Rui Mata & Renato Frey & David Richter & Jürgen Schupp & Ralph Hertwig, 2018. "Risk Preference: A View from Psychology," Journal of Economic Perspectives, American Economic Association, vol. 32(2), pages 155-172, Spring.
    23. Jürgen Meyerhoff & Malte Oehlmann & Priska Weller, 2015. "The Influence of Design Dimensions on Stated Choices in an Environmental Context," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 61(3), pages 385-407, July.
    24. Abbie A. Rogers & Fiona L. Dempster & Jacob I. Hawkins & Robert J. Johnston & Peter C. Boxall & John Rolfe & Marit E. Kragt & Michael P. Burton & David J. Pannell, 2019. "Valuing non-market economic impacts from natural hazards," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 99(2), pages 1131-1161, November.
    25. Olschewski, Roland & Bebi, Peter & Teich, Michaela & Wissen Hayek, Ulrike & Grêt-Regamey, Adrienne, 2012. "Avalanche protection by forests — A choice experiment in the Swiss Alps," Forest Policy and Economics, Elsevier, vol. 17(C), pages 19-24.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Villamayor-Tomas, Sergio & Sagebiel, Julian & Rommel, Jens & Olschewski, Roland, 2021. "Types of collective action problems and farmers’ willingness to accept agri-environmental schemes in Switzerland," Ecosystem Services, Elsevier, vol. 50(C).
    2. Tingling Li & Kangning Xiong & Shan Yang & Haiyan Liu & Yao Qin & Zhifu Wang, 2021. "Progress and Prospects of Forest Ecological Asset Research," Sustainability, MDPI, vol. 14(1), pages 1-18, December.
    3. Marielle Brunette & Marc Hanewinkel, 2021. "Assurance financière et assurance naturelle : une application à la forêt," Working Papers of BETA 2021-28, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    4. Hahn, Thomas & Sioen, Giles B. & Gasparatos, Alexandros & Elmqvist, Thomas & Brondizio, Eduardo & Gómez-Baggethun, Erik & Folke, Carl & Setiawati, Martiwi Diah & Atmaja, Tri & Arini, Enggar Yustisi & , 2023. "Insurance value of biodiversity in the Anthropocene is the full resilience value," Ecological Economics, Elsevier, vol. 208(C).
    5. Joshua Munkombwe & Jackson Phiri & Enock Siankwilimba, 2022. "Financial Innovation among Smallholder Farmers: Enhancing the uptake of Weather Index Insurance through a Pragmatic Approach," Journal of Social Sciences Advancement, Science Impact Publishers, vol. 3(1), pages 01-19.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Johnston, Robert J. & Börger, Tobias & Hanley, Nick & Meginnis, Keila & Ndebele, Tom & Siyal, Ghamz E. Ali & Beaumont, Nicola & de Vries, Frans P., 2024. "Consequences of omitting non-lethal wildlife impacts from stated preference scenarios," Journal of Environmental Economics and Management, Elsevier, vol. 126(C).
    2. de Ayala, Amaia & Hoyos, David & Mariel, Petr, 2015. "Suitability of discrete choice experiments for landscape management under the European Landscape Convention," Journal of Forest Economics, Elsevier, vol. 21(2), pages 79-96.
    3. Lan Anh Nguyen & Manh-Hung Nguyen & Viet-Ngu Hoang & Arnaud Reynaud & Michel Simioni & Clevo Wilson, 2024. "Tourists’ preferences and willingness to pay for protecting a World Heritage site from coastal erosion in Vietnam," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(11), pages 27607-27628, November.
    4. Arslan, Ruben C. & Brümmer, Martin & Dohmen, Thomas & Drewelies, Johanna & Hertwig, Ralph & Wagner, Gert G., 2020. "How people know their risk preference," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 10.
    5. Broberg, Thomas & Daniel, Aemiro Melkamu & Persson, Lars, 2021. "Household preferences for load restrictions: Is there an effect of pro-environmental framing?," Energy Economics, Elsevier, vol. 97(C).
    6. Bernd Fitzenberger & Gary Mena & Jan Nimczik & Uwe Sunde, 2022. "Personality Traits Across the Life Cycle: Disentangling Age, Period and Cohort Effects," The Economic Journal, Royal Economic Society, vol. 132(646), pages 2141-2172.
    7. Augeraud-Véron, Emmanuelle & Fabbri, Giorgio & Schubert, Katheline, 2021. "Volatility-reducing biodiversity conservation under strategic interactions," Ecological Economics, Elsevier, vol. 190(C).
    8. Olsthoorn, Mark & Schleich, Joachim & Guetlein, Marie-Charlotte & Durand, Antoine & Faure, Corinne, 2023. "Beyond energy efficiency: Do consumers care about life-cycle properties of household appliances?," Energy Policy, Elsevier, vol. 174(C).
    9. Michele Garagnani, 2023. "The predictive power of risk elicitation tasks," Journal of Risk and Uncertainty, Springer, vol. 67(2), pages 165-192, October.
    10. Kawamura, Tetsuya & Mori, Tomoharu & Motonishi, Taizo & Ogawa, Kazuhito, 2021. "Is Financial Literacy Dangerous? Financial Literacy, Behavioral Factors, and Financial Choices of Households," Journal of the Japanese and International Economies, Elsevier, vol. 60(C).
    11. Mika Akesaka & Peter Eibich & Chie Hanaoka & Hitoshi Shigeoka, 2023. "Temporal Instability of Risk Preference among the Poor: Evidence from Payday Cycles," American Economic Journal: Applied Economics, American Economic Association, vol. 15(4), pages 68-99, October.
    12. Joshua Tasoff & Wenjie Zhang, 2022. "The Performance of Time-Preference and Risk-Preference Measures in Surveys," Management Science, INFORMS, vol. 68(2), pages 1149-1173, February.
    13. Marielle Brunette & Marc Hanewinkel, 2021. "Assurance financière et assurance naturelle : une application à la forêt," Working Papers of BETA 2021-28, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    14. Thomas Knoke & Carola Paul & Elizabeth Gosling & Isabelle Jarisch & Johannes Mohr & Rupert Seidl, 2023. "Assessing the Economic Resilience of Different Management Systems to Severe Forest Disturbance," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(2), pages 343-381, February.
    15. Peter John Robinson & W. J. Wouter Botzen, 2023. "Can we nudge insurance demand by bundling natural disaster risks with other risks?," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 7(2), pages 39-46, December.
    16. Williams, Allan M. & Chen, Jason Li & Li, Gang & Baláž, Vladimír, 2022. "Risk, uncertainty and ambiguity amid Covid-19: A multi-national analysis of international travel intentions," Annals of Tourism Research, Elsevier, vol. 92(C).
    17. Tavárez, Héctor & Elbakidze, Levan, 2019. "Valuing recreational enhancements in the San Patricio Urban Forest of Puerto Rico: A choice experiment approach," Forest Policy and Economics, Elsevier, vol. 109(C).
    18. Hahn, Thomas & Sioen, Giles B. & Gasparatos, Alexandros & Elmqvist, Thomas & Brondizio, Eduardo & Gómez-Baggethun, Erik & Folke, Carl & Setiawati, Martiwi Diah & Atmaja, Tri & Arini, Enggar Yustisi & , 2023. "Insurance value of biodiversity in the Anthropocene is the full resilience value," Ecological Economics, Elsevier, vol. 208(C).
    19. Balcombe, Kelvin & Fraser, Iain, 2024. "A Note on an Alternative Approach to Experimental Design of Lottery Prospects," MPRA Paper 119743, University Library of Munich, Germany.
    20. Abdelaziz Alsharawy & Sheryl Ball & Alec Smith & Ross Spoon, 2021. "Fear of COVID-19 changes economic preferences: evidence from a repeated cross-sectional MTurk survey," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 7(2), pages 103-119, December.

    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:eee:ecolec:v:180:y:2021:i:c:s0921800920307783. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    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.