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Disasters, Household Decisions, and Insurance Mechanisms: A Review of Evidence and a Case Study from a Developing Country in Asia
Author(s) -
Sawada Yasuyuki
Publication year - 2017
Publication title -
asian economic policy review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.58
H-Index - 20
eISSN - 1748-3131
pISSN - 1832-8105
DOI - 10.1111/aepr.12154
Subject(s) - damages , variety (cybernetics) , welfare , panel data , business , government (linguistics) , economics , public economics , coping (psychology) , development economics , market economy , political science , linguistics , philosophy , artificial intelligence , computer science , law , econometrics , psychology , psychiatry
This article investigates whether and how Asian people's exposure to a variety of disasters undermine their decisions and welfare. Our case study from Vietnam, based on household panel data, shows that households adopt a variety of coping strategies against the damages caused by disasters especially through credit and labor markets. While the consumption risk sharing networks function effectively at the commune level, market and non‐market insurance mechanisms are not sufficient, especially at the regional, national, and international levels. Hence, it is imperative to strengthen market, government, and community based insurance mechanisms to diversify aggregate disaster risks at the individual, national, and regional levels in Asia.