Attitudes toward Flooding Risks in Vietnam: Implications for Insurance

Truong Cong Thanh Nghi ()
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Truong Cong Thanh Nghi: Faculty of Development Economics, University of Economics Ho Chi Minh City, 1A Hoang Dieu Street, Phu Nhuan District, Ho Chi Minh City

No rr2016011, EEPSEA Research Report from Economy and Environment Program for Southeast Asia (EEPSEA)

Abstract: This study used the experimental method to elicit abstract risk attitudes on and preferences for uncertainties based on the context of flooding in the Mekong Delta, Vietnam. In contrast to the common assumption that farmers are risk averse, our results showed that farmers are, on the average, risk neutral. Moreover, although farmers are ambiguity averse toward Ellsberg-type uncertainty, they are not averse to flooding uncertainty. We also found that farmers systematically underestimate the probability of flooding. The results of the study provide possible explanations for the low take-up of insurance.

Keywords: Vietnam; Behavioral Economics and social capital; Mitigation; Behavioral/Experimental Economics (search for similar items in EconPapers)
Date: 2016-01, Revised 2016-01
New Economics Papers: this item is included in nep-sea and nep-upt
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