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Disaster Mitigation and Insurance: Learning from Katrina

Author

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  • Howard Kunreuther

    (Risk Management and Decision Processes Center at the Wharton School of the University of Pennsylvania)

Abstract

Hurricane Katrina illustrates the natural disaster syndrome . Prior to a disaster, individuals in hazard-prone regions do not voluntarily adopt cost-effective loss reduction measures. The federal government then comes to the rescue with disaster assistance even if it claimed it had no intention of doing so prior to the event. There are a number of reasons why individuals do not protect themselves prior to a disaster. They underestimate the likelihood of a future disaster, often believing that it will not happen to them; have budget constraints; are myopic in their behavior; and/or do not want to be the only one on the block modifying their structure. Given this lack of interest in voluntary protection, benefit-cost analysis can determine when a well-enforced building code would be appropriate. The article concludes by highlighting the importance of public-private partnerships as a way of reducing future disaster losses and aiding the recovery process.

Suggested Citation

  • Howard Kunreuther, 2006. "Disaster Mitigation and Insurance: Learning from Katrina," The ANNALS of the American Academy of Political and Social Science, , vol. 604(1), pages 208-227, March.
    • Handle: RePEc:sae:anname:v:604:y:2006:i:1:p:208-227
    DOI: 10.1177/0002716205285685
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    References listed on IDEAS

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    Cited by:

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    3. Maruyama Rentschler,Jun Erik & Avner,Paolo & Marconcini,Mattia & Su,Rui & Strano,Emanuele & Bernard,Louise Alice Karine & Riom,Capucine Anne Veronique & Hallegatte,Stephane, 2022. "Rapid Urban Growth in Flood Zones : Global Evidence since 1985," Policy Research Working Paper Series 10014, The World Bank.
    4. Mona Ahmadiani & Susana Ferreira & Craig E. Landry, 2019. "Flood Insurance and Risk Reduction: Market Penetration, Coverage, and Mitigation in Coastal North Carolina," Southern Economic Journal, John Wiley & Sons, vol. 85(4), pages 1058-1082, April.
    5. Dingde Xu & Enlai Liu & Xuxi Wang & Hong Tang & Shaoquan Liu, 2018. "Rural Households’ Livelihood Capital, Risk Perception, and Willingness to Purchase Earthquake Disaster Insurance: Evidence from Southwestern China," IJERPH, MDPI, vol. 15(7), pages 1-19, June.
    6. Kalfin & Sukono & Sudradjat Supian & Mustafa Mamat, 2022. "Insurance as an Alternative for Sustainable Economic Recovery after Natural Disasters: A Systematic Literature Review," Sustainability, MDPI, vol. 14(7), pages 1-18, April.
    7. Serge Garcia & Katrin Erdlenbruch & Boniface Derrick Mbarga, 2024. "A discrete choice experiment to measure the impact of flood risk information on residential location choices," Working Papers of BETA 2024-22, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
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    9. Sebastain Awondo & Harris Hollans & Lawrence Powell & Chip Wade, 2023. "Estimating the effects of wind loss mitigation on home value," Southern Economic Journal, John Wiley & Sons, vol. 90(1), pages 71-89, July.
    10. Vladimir M. Cvetković & Giulia Roder & Adem Öcal & Paolo Tarolli & Slavoljub Dragićević, 2018. "The Role of Gender in Preparedness and Response Behaviors towards Flood Risk in Serbia," IJERPH, MDPI, vol. 15(12), pages 1-21, December.
    11. Rituparna Kaushik & Yashobanta Parida & Ravikiran Naik, 2024. "Human development and disaster mortality: evidence from India," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-15, December.
    12. Emileva, Begaiym & Kuhn, Lena & Bobojonov, Ihtiyor & Glauben, Thomas, 2023. "The role of smartphone-based weather information acquisition on climate change perception accuracy: Cross-country evidence from Kyrgyzstan, Mongolia and Uzbekistan," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 41, pages 1-1.
    13. Jennifer Oetzel & Chang Hoon Oh, 2021. "A storm is brewing: Antecedents of disaster preparation in risk prone locations," Strategic Management Journal, Wiley Blackwell, vol. 42(8), pages 1545-1570, August.
    14. Raymond J. Burby, 2006. "Hurricane Katrina and the Paradoxes of Government Disaster Policy: Bringing About Wise Governmental Decisions for Hazardous Areas," The ANNALS of the American Academy of Political and Social Science, , vol. 604(1), pages 171-191, March.

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