Insurance Demand Against Natural Hazards by Forest Owners: A French Case Study Using Discrete Choice Modeling

Fanny Claise and Marielle Brunette

Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg

Abstract: Natural events pose a real threat to forests around the world. Insurance contracts can help protect forest owners against these damaging events. However, there is considerable heterogeneity in terms of insurance adoption across countries. In France, for instance, the adoption rate is extremely low. In this article, we attempt to identify the characteristics of insurance contracts that influence forest owners’ demand for insurance against natural events. To this end, we employed a Discrete Choice Experiment methodology involving hypothetical forest insurance scenarios that varied according to the characteristics of the insurance contract such as the hazard(s) covered, the level of deductible, the duration, and the annual cost. The results, based on 317 responses from French private forest owners, demonstrate that some of the tested characteristics had a significant impact. Notably, forest owners were not willing to pay for storm insurance in addition to fire insurance. Conversely, they were willing to pay for insurance against the package including all hazards: fire, storm, drought and pathogens.

Keywords: Forest Insurance; Discrete Choice Experiment; Contract; Logit; Willingness to pay (WTP); Contract (search for similar items in EconPapers)
JEL-codes: B21 G22 Q23 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-dcm
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Persistent link: https://EconPapers.repec.org/RePEc:ulp:sbbeta:2025-42

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