Book by Palm Risa Hodgson Michael E
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Shortly before the Loma Prieta earthquake devastated areas of Northern California in 1989, Risa Palm and her associates had surveyed 2,500 homeowners in the area about their perception of risk from earthquakes. After the quake they surveyed the homeowners again and found that their perception of risk had increased but that most respondents were fatalistic and continued to ignore self-protective measures; those who personally experienced damage were more likely to buy insurance. A rare opportunity to analyze behavior change directly before and after a natural disaster, this survey has implications for policy makers, insurance officials, and those concerned with risk management.
This study demonstrates that mandatory protective measures such as earthquake insurance may be necessary because many property owners, even those clearly at risk, will not adopt them voluntarily under any circumstances. Its findings have important implications for policymakers, insurance regulators, and those concerned with risk management and research on natural disasters.
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