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Consumption insurance against natural disasters: evidence from the Great Hanshin-Awaji (Kobe) earthquake

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  • Yasuyuki Sawada
  • Satoshi Shimizutani

Abstract

We investigated whether people were insured against unexpected losses caused by the Great Hanshin-Awaji (Kobe) earthquake in 1995 and found that the full consumption insurance hypothesis was rejected overwhelmingly, suggesting the ineffectiveness of the formal/informal insurance mechanisms against the earthquake.

Suggested Citation

  • Yasuyuki Sawada & Satoshi Shimizutani, 2007. "Consumption insurance against natural disasters: evidence from the Great Hanshin-Awaji (Kobe) earthquake," Applied Economics Letters, Taylor & Francis Journals, vol. 14(4), pages 303-306.
    • Handle: RePEc:taf:apeclt:v:14:y:2007:i:4:p:303-306
    DOI: 10.1080/13504850500447364
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    References listed on IDEAS

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    1. Horwich, George, 2000. "Economic Lessons of the Kobe Earthquake," Economic Development and Cultural Change, University of Chicago Press, vol. 48(3), pages 521-542, April.
    2. Kohara, Miki & Ohtake, Fumio & Saito, Makoto, 2002. "A Test of the Full Insurance Hypothesis: The Case of Japan," Journal of the Japanese and International Economies, Elsevier, vol. 16(3), pages 335-352, September.
    3. Mace, Barbara J, 1991. "Full Insurance in the Presence of Aggregate Uncertainty," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 928-956, October.
    4. Martin Ravallion & Shubham Chaudhuri, 1997. "Risk and Insurance in Village India: Comment," Econometrica, Econometric Society, vol. 65(1), pages 171-184, January.
    5. Cochrane, John H, 1991. "A Simple Test of Consumption Insurance," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 957-976, October.
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