Perceived risk and the earthquake insurance purchase decision: a commentary on a paper by Lennart Sjöberg

Risa Palm

Journal of Risk Research, 1999, vol. 2, issue 4, 289-294

Abstract: Sjöberg in his 1994 report entitled 'Perceived risk vs. demand for risk reduction' has argued that 'risk perception' involves two separable components: the probability that an event will occur and the consequences of this event. Based on three empirical studies, Sjöberg concluded that one of these two factors is far more important than the other: that the perceived severity of consequences is a better predictor of demand for mitigation than the perceived probability of harm or risk. This paper focuses on the second of the three reported studies involving the adoption of home insurance in Sweden. The empirical analysis reported here, based on survey research in California, supports the conclusion that perceived probability of occurrence continues to be an important factor in the decision to purchase voluntary hazards insurance.

Date: 1999
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Citations: View citations in EconPapers (3)

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DOI: 10.1080/136698799376736

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