79 research outputs found

    Natural disasters and governmental aid : is there a charity hazard?

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    In the aftermath of natural disasters, governments frequently provide financial aid for affected households. This policy can have adverse effects if individuals anticipate it and forgo private precaution measures. While theoretical literature unequivocally suggests this so called “charity hazard”, empirical studies yield ambiguous results. Drawing on rich survey data from German homeowners, we analyze charity hazard for different flood precaution strategies, namely insurance uptake and non-financial protection measures, and different flood risk areas. Our results indicate a substantial charity hazard in the insurance market for individuals residing in flood-prone areas. In contrast, we find a positive correlation between governmental aid and non-financial protection measures. Moreover, our results suggest that insurance and non-financial protection measures are rather complements than substitutes. Finally, we provide suggestive evidence that status-quo bias might play an important role for insurance uptake

    Reviews

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    The following publications have been reviewed by the mentioned authors;The Art of the Engineer by Ken Baynes and Francis Pugh, reviewed by Michael SayerVictorian Crafts Revived by Anne Hulbert, reviewed by Andor GommeA Potter's Mexico by Irwin and Emily Whittaker, reviewed by Michael PaffardPainting Without a Brush by Roy Sparkes, reviewed by Edward PhelpsMaking Wooden Toys by Roger Polley, reviewed by Bob NeillMetalwork Theory by R. A. Mold, reviewed by Leslie Deem
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