Date of Original Version

2006

Type

Working Paper

Rights Management

All Rights Reserved

Abstract or Description

We examine the risks and management of natural disasters. A benefit-cost framework focuses attention on (1) designing control structures, such as dams and levees, and mitigation policies, such as construction standards, to protect lives and property against small and medium, rather than large sized natural disasters; and (2) warning and evacuation to save lives for large natural disasters. Providing information rather than command solutions generally enhances social benefits, if people understand the risks and bear the expected costs. Requiring actuarially fair insurance simultaneously provides information and has individuals bear the expected costs.

DOI

10.1007/s11166-006-0174-9

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Published In

Journal of Risk and Uncertainty , 3, 117-130.