NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Managing Catastrophic Risk

Howard Kunreuther, Geoffrey Heal

NBER Working Paper No. 18136
Issued in June 2012
NBER Program(s):   EEE

A principal reason that losses from catastrophic risks have been increasing over time is that more individuals and firms are locating in harm’s way while not taking appropriate protective measures. Several behavioural biases lead decision-makers not to invest in adaptation measures until after it is too late. In an interdependent world with no intervention by the public sector, it may be economically rational for those at risk not to invest in protective measures. Risk management strategies that involve private-public partnerships that address these issues may help in reducing future catastrophic losses. These may include multi-year insurance contracts, well-enforced regulations, third-party inspections, and alternative risk transfer instruments such as catastrophe bonds.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w18136

Users who downloaded this paper also downloaded these:
Kunreuther, Heal, Allen, Edenhofer, Field, and Yohe w18607 Risk Management and Climate Change
Kleindorfer and Kunreuther Challenges Facing the Insurance Industry in Managing Catastrophic Risks
Lakdawalla and Zanjani w12742 Catastrophe Bonds, Reinsurance, and the Optimal Collateralization of Risk-Transfer
Weitzman w18144 A Precautionary Tale of Uncertain Tail Fattening
Jaffee, Kunreuther, and Michel-Kerjan w14210 Long Term Insurance (LTI) for Addressing Catastrophe Risk
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us