Séminaire doctorant

Beka Lomidze

(BSE)

« Gone with the wind? Climate shocks, insurance demand & wellbeing »

Natural hazards are becoming more frequent and more intense, presenting new challenges for climate insurances. Existing evidence tends to focus on experimental studies or the short-run impact of actual disasters. We utilize original survey data on a sample of Swedish forest owners interviewed three years after Gudrun, the ‘storm of the century’, which caused extensive damages to Southern Swedish forest in January 2005. We first document the timing of insurance take-up in response to hurricane occurrence over fifty years, then focus on the middle/long run response to Gudrun. We exploit the quasi-random spatial nature of the shock while conditioning on forest types obtained from remote-sensed data. Our empirical analysis shows evidence of a persistence effect of actual damages on insurance demand. It is consistent with a long-term impact on subjective well-being, which may be due to capital destruction, non-pecuniary losses and fear. This welfare impact is partly mitigated by owners’ insurance holding.

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