Author: Carolyn M. Kousky

Publisher:

Published: 2008

Total Pages:

ISBN-13:

The paper examines the contract choices and retention rates of policyholders and explains variation in take-up rates and average coverage amounts by census tract in terms of economic, demographic, and geographic variables. Take-up rates are much lower in St. Louis County than in coastal areas. Risk variables, including the extent of 100-year and 500-year floodplains, being on a major river, and the presence of a levee, as well as wealth variables, are significant predicators of take-up rates and average coverage amounts. The third paper shifts focus to firms and uses a simple game-theoretic model to explain the decision of firms to locate in a hazardous area through the effects of signals (proxies firms look to as an indication of risk levels) and spillovers (positive or negative externalities from one firm to a neighboring firm). The hypotheses derived concerning the type of firm that is first to invest in a risky location and the dynamic of development over time are compared to development patterns in the floodplain of Chesterfield, Missouri.