The impact of preemptive investment on natural disasters

This paper studies the impact of preemptive investment against natural disasters on the future occurrence of landslides and the losses associated with it. Based on a panel of 746 Colombian municipalities with medium and high risk of landslides and an instrumental variable approach, we find that pree...

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Bibliographic Details
Published inPapers in regional science Vol. 101; no. 5; pp. 1087 - 1104
Main Authors Ayala‐García, Jhorland, Dall'Erba, Sandy
Format Journal Article
LanguageEnglish
Published Urbana Blackwell Publishing Ltd 01.10.2022
Subjects
Environmental risk
High risk
Insurance
Investments
Landslides
Landslides & mudslides
Local government
Morality
Municipalities
Natural disasters
Preempting
Prevention programs
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Summary:This paper studies the impact of preemptive investment against natural disasters on the future occurrence of landslides and the losses associated with it. Based on a panel of 746 Colombian municipalities with medium and high risk of landslides and an instrumental variable approach, we find that preemptive public investment can reduce the number of landslides, the number of people who die, are injured, or missing after a landslide, as well as the number of people affected. However, we do not find it has any effect on the number of houses destroyed. The results reveal that local governments focus their preventive measures on saving the lives and the physical integrity of their citizens, but they pay less attention to the direct market losses of natural disasters. These results are relevant in the presence of imperfect private insurance markets and increased informal settlements.
ISSN:1056-8190
1435-5957
DOI:10.1111/pirs.12700