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Essays on Insurance Market and Behavioral Responses to Environmental Risk
Essays on Insurance Market and Behavioral Responses to Environmental Risk
상세정보
- 자료유형
- 학위논문 서양
- 최종처리일시
- 20260202104649
- ISBN
- 9798290614700
- DDC
- 000
- 저자명
- Zhou, Mengfei.
- 서명/저자
- Essays on Insurance Market and Behavioral Responses to Environmental Risk
- 발행사항
- [Sl] : University of California, Davis, 2025
- 발행사항
- Ann Arbor : ProQuest Dissertations & Theses, 2025
- 형태사항
- 127 p
- 주기사항
- Source: Dissertations Abstracts International, Volume: 87-01, Section: A.
- 주기사항
- Advisor: Merel, Pierre.
- 학위논문주기
- Thesis (Ph.D.)--University of California, Davis, 2025.
- 초록/해제
- 요약This dissertation explores how individuals and markets respond to environmental risk. Chapter 1 develops a theoretical model of competitive insurance market equilibrium under endogenous adverse selection. I extend the canonical adverse-selection model of Rothschild and Stiglitz (RS) by allowing individuals to endogenously change their risk level through mitigation. I assume that agents are heterogeneous in their risk preferences, and heterogeneity in risk aversion induces them to take different levels of mitigation effort and insurance coverage. I begin with a model featuring two types. In the two-type model, I show that there is no pooling equilibrium in which only one contract is provided in the market that incentivizes some agents to mitigate. I further identify a new separating equilibrium in which high-risk-aversion agents opt not to mitigate and receive full insurance priced at the high probability of loss, while low-risk-aversion agents choose to mitigate and receive partial insurance priced at the lower risk level. Unlike in RS, the insurance coverage for low-risk-aversion types is now limited to the maximum level that still incentivizes them to mitigate. I further extend the analysis to a setting with a continuum of risk preferences. I identify several potential equilibria along with the necessary conditions for each to be an equilibrium. The model suggests that the equilibrium can involve at most one contract that attracts both mitigators and non-mitigators in the two-contract case.Chapter 2 studies the impact of wildfires on the home insurance market in California by combining detailed GIS data on historical wildfire burn areas with ZIP-code-level insurance outcomes. I use a difference-in-differences (DiD) design that compares ZIP codes that have experienced major wildfire occurrence to those that have not. I define a major wildfire as one where the cumulative burned area exceeds 10%, and use ZIP codes where the cumulative burned area has never exceeded 5% as the control group. Following major wildfire occurrence, I estimate that average insurance premiums increase, the number of insured housing units decreases, and the average insurance coverage increases for owner-occupied insurance policies. I test the robustness of the findings using alternative definitions for treatment and control groups, and confirm that the results are not driven by the specific thresholds chosen. I further provide suggestive evidence for several mechanisms, including increasing demand and decreasing insurance supply.Chapter 3 investigates the effect of air pollution on risky behavior by leveraging daily variation in PM2.5 concentrations and store-level lottery ticket sales in California. To address the endogeneity of air pollution, I exploit exogenous variation in air pollution induced by wildfire smoke as an instrumental variable for ambient PM2.5 concentrations. The main results indicate that higher ambient PM2.5 concentrations are associated with an increase in scratcher ticket purchases, while there is no statistically significant effect on draw ticket sales. These findings suggest that air pollution reduces consumer patience and increases individuals' preference for immediate rewards.
- 키워드
- Air pollution
- 키워드
- Home insurance
- 키워드
- Risky behavior
- 키워드
- Wildfire
- 기타저자
- University of California, Davis Agricultural and Resource Economics
- 기본자료저록
- Dissertations Abstracts International. 87-01A.
- 전자적 위치 및 접속
- 로그인 후 원문을 볼 수 있습니다.
MARC
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■00520260202104649
■006m o d
■007cr#unu||||||||
■020 ▼a9798290614700
■035 ▼a(MiAaPQ)AAI32115026
■040 ▼aMiAaPQ▼cMiAaPQ
■0820 ▼a000
■1001 ▼aZhou, Mengfei.
■24510▼aEssays on Insurance Market and Behavioral Responses to Environmental Risk
■260 ▼a[Sl]▼bUniversity of California, Davis▼c2025
■260 1▼aAnn Arbor▼bProQuest Dissertations & Theses▼c2025
■300 ▼a127 p
■500 ▼aSource: Dissertations Abstracts International, Volume: 87-01, Section: A.
■500 ▼aAdvisor: Merel, Pierre.
■5021 ▼aThesis (Ph.D.)--University of California, Davis, 2025.
■520 ▼aThis dissertation explores how individuals and markets respond to environmental risk. Chapter 1 develops a theoretical model of competitive insurance market equilibrium under endogenous adverse selection. I extend the canonical adverse-selection model of Rothschild and Stiglitz (RS) by allowing individuals to endogenously change their risk level through mitigation. I assume that agents are heterogeneous in their risk preferences, and heterogeneity in risk aversion induces them to take different levels of mitigation effort and insurance coverage. I begin with a model featuring two types. In the two-type model, I show that there is no pooling equilibrium in which only one contract is provided in the market that incentivizes some agents to mitigate. I further identify a new separating equilibrium in which high-risk-aversion agents opt not to mitigate and receive full insurance priced at the high probability of loss, while low-risk-aversion agents choose to mitigate and receive partial insurance priced at the lower risk level. Unlike in RS, the insurance coverage for low-risk-aversion types is now limited to the maximum level that still incentivizes them to mitigate. I further extend the analysis to a setting with a continuum of risk preferences. I identify several potential equilibria along with the necessary conditions for each to be an equilibrium. The model suggests that the equilibrium can involve at most one contract that attracts both mitigators and non-mitigators in the two-contract case.Chapter 2 studies the impact of wildfires on the home insurance market in California by combining detailed GIS data on historical wildfire burn areas with ZIP-code-level insurance outcomes. I use a difference-in-differences (DiD) design that compares ZIP codes that have experienced major wildfire occurrence to those that have not. I define a major wildfire as one where the cumulative burned area exceeds 10%, and use ZIP codes where the cumulative burned area has never exceeded 5% as the control group. Following major wildfire occurrence, I estimate that average insurance premiums increase, the number of insured housing units decreases, and the average insurance coverage increases for owner-occupied insurance policies. I test the robustness of the findings using alternative definitions for treatment and control groups, and confirm that the results are not driven by the specific thresholds chosen. I further provide suggestive evidence for several mechanisms, including increasing demand and decreasing insurance supply.Chapter 3 investigates the effect of air pollution on risky behavior by leveraging daily variation in PM2.5 concentrations and store-level lottery ticket sales in California. To address the endogeneity of air pollution, I exploit exogenous variation in air pollution induced by wildfire smoke as an instrumental variable for ambient PM2.5 concentrations. The main results indicate that higher ambient PM2.5 concentrations are associated with an increase in scratcher ticket purchases, while there is no statistically significant effect on draw ticket sales. These findings suggest that air pollution reduces consumer patience and increases individuals' preference for immediate rewards.
■590 ▼aSchool code: 0029.
■653 ▼aAdverse selection
■653 ▼aAir pollution
■653 ▼aHome insurance
■653 ▼aInsurance market equilibrium
■653 ▼aRisky behavior
■653 ▼aWildfire
■690 ▼a0438
■690 ▼a0511
■71020▼aUniversity of California, Davis▼bAgricultural and Resource Economics.
■7730 ▼tDissertations Abstracts International▼g87-01A.
■790 ▼a0029
■791 ▼aPh.D.
■792 ▼a2025
■793 ▼aEnglish
■85640▼uhttp://www.riss.kr/pdu/ddodLink.do?id=T17358357▼nKERIS▼z이 자료의 원문은 한국교육학술정보원에서 제공합니다.
