Household's disaster prevention activities, agglomeration and economic growth

This study analyses the effects of household's natural disaster prevention behaviour on the population distribution in urban and rural areas and on fertility in a simple overlapping‐generations model economy. Natural disasters such as floods and earthquakes happen world‐wide and affect the economic activities. This paper specifically addresses household preparatory behaviour for natural disasters and analyses effects of disaster probability on the population distribution in urban areas and rural areas and fertility in an economy. Results of our analyses show that the increase of disaster probability can engender promotion of urban agglomeration and decreases fertility. Moreover, we introduce a public natural disaster prevention policy into the model and analyse the effects of public policy for natural disasters on the economy.