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Flood Insurance or Disaster Loans: An Economic Evaluation
Author(s) -
Rettger Michael J.,
Boisvert Richard N.
Publication year - 1979
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1239436
Subject(s) - subsidy , loan , flood myth , business , flood insurance , actuarial science , distribution (mathematics) , natural disaster , finance , private sector , economics , economic growth , geography , mathematical analysis , mathematics , archaeology , meteorology , market economy
Alternative federal flood disaster assistance programs are evaluated through an economic comparison of flood insurance and disaster loan programs. The distribution of costs, benefits, and program transfers, both private and public, are simulated over time and are analyzed to determine the sensitivity of program performance to specific program parameters. Empirical results demonstrate that both programs provide adequate levels of protection at approximately equivalent costs. Variations in premium and interest rate subsidies have major effects on the distribution of total costs between the public and private sectors.