Wildfire Insurance, Information, and Self-Protection

Judson Boomhower, Meredith Fowlie and Andrew J. Plantinga

AEA Papers and Proceedings, 2023, vol. 113, 310-15

Abstract: Like other climate-related disasters, wildfires are intensifying. Property owners can reduce their vulnerability to wildfire losses but are not well informed about the costs and benefits of available self-protection investments. Technological advances mean that insurers are increasingly able to monitor household mitigation behavior. We revisit the problem of self-protection from risk in a setting where households have incomplete insurance and limited information about self-protection investments. Insurer discounts for self-protection generate additional value by informing households about self-protection investments that also reduce uninsured losses. This information provision increases the responsiveness of self-protection to ex post disaster assistance, with implications for optimal government transfers.

JEL-codes: D83 G22 G28 Q54 Q57 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:aea:apandp:v:113:y:2023:p:310-15

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DOI: 10.1257/pandp.20231104

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