Any entity offering flood insurance, whether it is private or government‐administered such as the National Flood Insurance Program (NFIP), faces the challenge of solvency. This is especially true for the NFIP, where homeowner affordability criteria limit the opportunity to charge fully risk‐based premiums. One solution is to remove the highest flood risk properties from the insurer's book of business. Acquisition (buyout) of flood‐prone structures is a potentially permanent solution that eliminates the highest risk properties while providing homeowners with financial assistance to relocate in a less risky location. To encourage participation, homeowners are offered a preflood fair market value of their damaged (or at risk of damage) structures. Although many factors have been shown to affect a homeowner's decision to accept an acquisition offer, very little research has been devoted to the influence of price or monetary incentive offered on homeowners' willingness to participate in acquisition programs. We estimate a pooled probit model and employ a bootstrap methodology to determine the effects of hypothetical home price offers on homeowners' acquisition decisions. We do so while controlling for environmental factors, property characteristics, and homeowner sociodemographic characteristics. Results show that price indeed has a positive effect on likelihood of accepting an acquisition contract. Furthermore, estimated homeowner supply curves differ significantly based on the damage status of the acquisition offer, as well as homeowner and property characteristics.
The Community Rating System (CRS) was introduced to encourage community-level flood mitigation and increase household-level flood insurance uptake through the National Flood Insurance Program (NFIP). Using historical data of policies-in-force and flood damage claims from 1998-2014 for all NFIP communities in Alabama and Mississippi, we estimate the relationship between community participation in the CRS and the number of policies-in-force, as well on flood damage claims. We find a significant, positive, and generally increasing effect of CRS participation on insurance uptake. Reduced flood damage claims are found to be limited to communities with a very high level of CRS participation (Class 5) only.
The implementation of seasonal fishery closures (SFC) can be controversial due to the frequent lack of clear objectives, monitoring and empirical evidence of management success. In the Philippines, an SFC implemented for the conservation of important fishery commodities in the Visayan Sea has been ruled a success after stricter implementation of this fishery policy in 2012. However, a comprehensive, detailed, and robust analysis of this fishery policy is lacking. Using a difference-in-differences (DID) framework, we estimated the effect of SFC on the interannual and seasonal catch for sardine and mackerel. We expanded our analysis to other species not regulated under the SFC policy. We also conducted semi-structured interviews (N = 235), focus group discussions (N = 9) and key informant interviews (N = 37) involving municipal fisheries stakeholders in the surrounding municipalities around the Visayan Sea, and representatives from the government and non-government agencies, to complement our analyses. Seasonal analyses of catch data show a significant increase in sardine catch at the end of the seasonal closure among SFC-participating provinces. However, overall, the SFC had no significant effect on sardine interannual catch among the provinces participating in the SFC. We also found no significant effect of the SFC on interannual and seasonal catch for mackerel. Furthermore, our findings show no significant changes in fishing pressure to other aquatic species. Interview results corroborate our DID findings for mackerel, but not for sardine. The varying perceptions on the outcomes of the SFC policy can be attributed to several challenges such as lack of implementing guidelines, lack of alternative livelihoods for the affected stakeholders, persistence of illegal fishing, and uneven implementation of the SFC. Since the management objective of this SFC was to conserve the regulated species, alternative management measures may be needed to achieve this goal. This could entail more consistent enforcement, improved cooperation and communication between fisheries managers and stakeholders, fish size or gear restrictions, and identification and conservation of key habitats needed to restore overexploited species.
The Community Rating System (CRS) was introduced to encourage community-level flood mitigation and increase household-level National Flood Insurance Program (NFIP) participation. It is not clear, however, if and to what extent community participation in the CRS increases household participation in the NFIP and decreases damage claims payments. We employ genetic matching methods and estimate fixed-effects and Mundlak-style panel regression models that control for key geospatial, socioeconomic, and time effects to isolate the CRS treatment effect on these outcomes. Results show a positive and significant effect of CRS participation on NFIP participation, whereas significant effects on damage claims payments are limited.
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