Household insurance expenditure as an indicator of urban resilience

Demand for household insurance is intuitively perceived as contributing to household and community resilience. However the causality in this relationship is not clear. This paper examines household insurance expenditure and the generation of urban resilience as jointly determined. Potential endogene...

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Bibliographic Details
Published in:International journal of disaster risk reduction 2018-10, Vol.31, p.102-111
Main Authors: Felsenstein, Daniel, Vernik, Masha, Israeli, Yael
Format: Article
Language:English
Subjects:
Endogeneity
Instrumental variables
Insurance
Urban resilience
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Summary:Demand for household insurance is intuitively perceived as contributing to household and community resilience. However the causality in this relationship is not clear. This paper examines household insurance expenditure and the generation of urban resilience as jointly determined. Potential endogeneity is purged by estimating this relationship as a system and using an instrumental variable approach. Empirical analysis based on aggregated Israeli household expenditure data is used. Results show that instrumenting makes a difference, that a distinction needs to be drawn between personal resilience and environmental resilience and that insurance coverage has an independent effect on resilience different to that of classic social (personal) and economic (property and place-based) characteristics. The policy context of the findings are discussed.
ISSN:2212-4209
2212-4209
DOI:10.1016/j.ijdrr.2018.04.008