Valuing flood disasters using the life satisfaction approach

Simon Luechinger and Paul Raschky

Journal of Public Economics, 2009, vol. 93, issue 3-4, 620-633

Abstract: This paper argues that life satisfaction data can be used to value natural disasters. We discuss the strengths of this approach, compare it to traditional methods and apply it to estimate and monetize utility losses caused by floods in 16 European countries between 1973 and 1998. Using combined cross-section and time-series data, we find a negative impact of floods on life satisfaction that is sizeable, robust and significant. The estimates are comparable to price discounts found in housing markets. In an exploratory analysis, we find that risk transfer mechanisms such as mandatory insurance have large mitigating effects.

Keywords: Life; satisfaction; approach; Non-market; valuation; Cost-benefit; analysis; Subjective; well-being; Risk-prevention; Natural; hazards; Flood (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (264)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047-2727(08)00153-9
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:93:y:2009:i:3-4:p:620-633

Access Statistics for this article

Journal of Public Economics is currently edited by R. Boadway and J. Poterba

More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().