Willingness to Pay for Low Probability, Low Loss Hazard Insurance

John Whitehead

No 06-08, Working Papers from Department of Economics, Appalachian State University

Abstract: We estimate the willingness to pay for low probability, low loss hazard insurance with the contingent valuation method. The application is to household hurricane evacuation cost insurance – a new product for which there is currently no market. We find that a majority of respondents would not purchase the product at even the lowest price. In general, respondents are rational in response to the probability and costs of a evacuation. Respondents are not likely to pay anything for evacuation cost insurance.

Date: 2006
New Economics Papers: this item is included in nep-ias, nep-mic and nep-upt
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