Articlegreen1985

A Test of the Expected Utility Model: Evidence from Earthquake Risks

David S. Brookshire · Mark Thayer · John Tschirhart · William D. Schulze

266 citations0/0 files storedJournal of Political Economy

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Decision-Making and Behavioral Economics Earthquake and Disaster Impact Studies Economic and Environmental Valuation

Abstract

The purposes of this paper are twofold. The first is to demonstrate that the expected utility hypothesis is a reasonable description of behavior for consumers who face a low-probability, high-loss natural hazard event, given that they have adequate information. The second is to demonstrate that in California information non earthquake hazards was generated by a 1974 state law that created a market for safe housing that previously did not exist.

Citations in this library

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References

1974Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition 1978Hedonic housing prices and the demand for clean air 2007The Expected Utility Model: Its Variants, Purposes, Evidence and Limitations 1977THE DEMAND FOR RISKY ASSETS 1983Risk Aversion Revisited

Cited by

2005The Death Toll from Natural Disasters: The Role of Income, Geography, and Institutions 2002DO NATURAL DISASTERS PROMOTE LONG‐RUN GROWTH?1989Utilities and Quality-Adjusted Life Years 1995Contingent Valuation and Revealed Preference Methodologies: Comparing the Estimates for Quasi-Public Goods 2004Effects of Flood Hazards on Property Values: Evidence before and after Hurricane Floyd 2009Valuing Air Quality Using the Life Satisfaction Approach 2012Changes in implicit flood risk premiums: Empirical evidence from the housing market 2007Does rising income increase or decrease damage risk from natural disasters?

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