HOUSEHOLD LOCATION CHOICE AND PUBLIC INFORMATION PROVISION ABOUT DISASTER RISK

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A location pattern of population and assets in a region is determined by the location choice behavior of individuals as equilibrium. Individuals collect information of lands in the considered region. Based on the information they obtained, they decide a specific location and size of land to locate, considering its quality and its rental price under the budget constraint. Vulnerability of the area is one of the major factors of quality of the land. Therefore, public information on vulnerability of the land against natural disaster has potential to achieve the appropriate land use patterns and to contribute redaction of the damage potential of the region.In this study, we investigated the conditions for public information about the disaster risk to contribute the reduction of the damage potential of the region. We first modeled location choice behavior under perfect public information about the disaster risk and equilibrium land-use patterns are described. Secondly, we investigate welfar … More e measures which can analyze the welfare changes between the situations before and after the information is provided. Thirdly, we focused the nature of a large-scale disaster that such a disaster is a rare event. In this situation, it is difficult to assume the perfect information because individuals cannot achieve an appropriate risk perception in which perceived risk level is identical with the objective risk level. Biases in risk perception is explicitly considered and a theoretical analysis is conducted by modifying the location choice model and equilibrium model which we have presented. As a result, we showed the impossibility to attain efficient land use patterns through information provision and indirect economic countermeasures, such as taxes and subsidies. Fourthly, we also focused the role of insurance. A literature surveys about the French insurance system is conducted. The possibility for designing sustainable insurance program is investigated in the case of earthquake insurance program for Hyogo prefecture, Japan. Less