How Economic Growth and Rational Decisions Can Make Disaster Losses Grow Faster Than Wealth
Assuming that capital productivity is higher in areas at risk from natural hazards (such as coastal zones or flood plains), this paper shows that rapid development in these areas -- and the resulting increase in disaster losses -- may be the conseq...
| Main Author: | |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
|
| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110329162349 http://hdl.handle.net/10986/3384 |
| id |
okr-10986-3384 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-33842021-04-23T14:02:09Z How Economic Growth and Rational Decisions Can Make Disaster Losses Grow Faster Than Wealth Hallegatte, Stephane ACCOUNTING AGENTS AGRICULTURE BANKRUPTCY CAPITAL INVESTMENT CASUALTIES CATASTROPHIC EVENTS CLIMATE CHANGE CLIMATE CONDITIONS DAMAGES DATA QUALITY DECISION MAKING DEVELOPMENT NETWORK DEVELOPMENT POLICY DIMINISHING RETURNS DISASTER DISASTER INSURANCE DISASTER RISK DISASTER RISK REDUCTION DISASTER RISKS DISASTER SITUATION DISASTERS DRIVERS EARLY WARNING EARTHQUAKE EARTHQUAKES ECONOMETRIC ANALYSES ECONOMETRIC ANALYSIS ECONOMIC GROWTH ECONOMIC LOSS ECONOMICS EVACUATION EXPECTED UTILITY EXPORTS EXTERNALITIES FATALITIES FLOOD FLOOD INSURANCE FLOOD PROTECTIONS FLOODS FORECASTS GDP HURRICANE HURRICANES IMPERFECT INFORMATION INCOME INSURANCE INSURANCE COVERAGE INVENTORIES INVESTIGATIONS MARKET FAILURES MORAL HAZARD MORAL HAZARDS NATURAL DISASTERS NATURAL HAZARDS OPTIMIZATION PERFECT INFORMATION POSITIVE EXTERNALITIES PRODUCTIVITY PRODUCTIVITY INCREASES RECONSTRUCTION RELIEF RISK ANALYSES RISK ANALYSIS RISK ASSESSMENTS RISK AVERSION RISK MANAGEMENT RISK MANAGEMENT POLICIES RISK MITIGATION RISK REDUCTION SAFETY SLUMS SOCIAL COSTS STORM SUPPLIERS TOTAL OUTPUT VALUE ADDED WEALTH Assuming that capital productivity is higher in areas at risk from natural hazards (such as coastal zones or flood plains), this paper shows that rapid development in these areas -- and the resulting increase in disaster losses -- may be the consequence of a rational and well-informed trade-off between lower disaster losses and higher productivity. With disasters possibly becoming less frequent but increasingly destructive in the future, average disaster losses may grow faster than wealth. Myopic expectations, lack of information, moral hazard, and externalities reinforce the likelihood of this scenario. These results have consequences on how to design risk management and climate change policies. 2012-03-19T18:01:30Z 2012-03-19T18:01:30Z 2011-03-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110329162349 http://hdl.handle.net/10986/3384 English Policy Research working paper ; no. WPS 5617 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCOUNTING AGENTS AGRICULTURE BANKRUPTCY CAPITAL INVESTMENT CASUALTIES CATASTROPHIC EVENTS CLIMATE CHANGE CLIMATE CONDITIONS DAMAGES DATA QUALITY DECISION MAKING DEVELOPMENT NETWORK DEVELOPMENT POLICY DIMINISHING RETURNS DISASTER DISASTER INSURANCE DISASTER RISK DISASTER RISK REDUCTION DISASTER RISKS DISASTER SITUATION DISASTERS DRIVERS EARLY WARNING EARTHQUAKE EARTHQUAKES ECONOMETRIC ANALYSES ECONOMETRIC ANALYSIS ECONOMIC GROWTH ECONOMIC LOSS ECONOMICS EVACUATION EXPECTED UTILITY EXPORTS EXTERNALITIES FATALITIES FLOOD FLOOD INSURANCE FLOOD PROTECTIONS FLOODS FORECASTS GDP HURRICANE HURRICANES IMPERFECT INFORMATION INCOME INSURANCE INSURANCE COVERAGE INVENTORIES INVESTIGATIONS MARKET FAILURES MORAL HAZARD MORAL HAZARDS NATURAL DISASTERS NATURAL HAZARDS OPTIMIZATION PERFECT INFORMATION POSITIVE EXTERNALITIES PRODUCTIVITY PRODUCTIVITY INCREASES RECONSTRUCTION RELIEF RISK ANALYSES RISK ANALYSIS RISK ASSESSMENTS RISK AVERSION RISK MANAGEMENT RISK MANAGEMENT POLICIES RISK MITIGATION RISK REDUCTION SAFETY SLUMS SOCIAL COSTS STORM SUPPLIERS TOTAL OUTPUT VALUE ADDED WEALTH |
| spellingShingle |
ACCOUNTING AGENTS AGRICULTURE BANKRUPTCY CAPITAL INVESTMENT CASUALTIES CATASTROPHIC EVENTS CLIMATE CHANGE CLIMATE CONDITIONS DAMAGES DATA QUALITY DECISION MAKING DEVELOPMENT NETWORK DEVELOPMENT POLICY DIMINISHING RETURNS DISASTER DISASTER INSURANCE DISASTER RISK DISASTER RISK REDUCTION DISASTER RISKS DISASTER SITUATION DISASTERS DRIVERS EARLY WARNING EARTHQUAKE EARTHQUAKES ECONOMETRIC ANALYSES ECONOMETRIC ANALYSIS ECONOMIC GROWTH ECONOMIC LOSS ECONOMICS EVACUATION EXPECTED UTILITY EXPORTS EXTERNALITIES FATALITIES FLOOD FLOOD INSURANCE FLOOD PROTECTIONS FLOODS FORECASTS GDP HURRICANE HURRICANES IMPERFECT INFORMATION INCOME INSURANCE INSURANCE COVERAGE INVENTORIES INVESTIGATIONS MARKET FAILURES MORAL HAZARD MORAL HAZARDS NATURAL DISASTERS NATURAL HAZARDS OPTIMIZATION PERFECT INFORMATION POSITIVE EXTERNALITIES PRODUCTIVITY PRODUCTIVITY INCREASES RECONSTRUCTION RELIEF RISK ANALYSES RISK ANALYSIS RISK ASSESSMENTS RISK AVERSION RISK MANAGEMENT RISK MANAGEMENT POLICIES RISK MITIGATION RISK REDUCTION SAFETY SLUMS SOCIAL COSTS STORM SUPPLIERS TOTAL OUTPUT VALUE ADDED WEALTH Hallegatte, Stephane How Economic Growth and Rational Decisions Can Make Disaster Losses Grow Faster Than Wealth |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 5617 |
| description |
Assuming that capital productivity is
higher in areas at risk from natural hazards (such as
coastal zones or flood plains), this paper shows that rapid
development in these areas -- and the resulting increase in
disaster losses -- may be the consequence of a rational and
well-informed trade-off between lower disaster losses and
higher productivity. With disasters possibly becoming less
frequent but increasingly destructive in the future, average
disaster losses may grow faster than wealth. Myopic
expectations, lack of information, moral hazard, and
externalities reinforce the likelihood of this scenario.
These results have consequences on how to design risk
management and climate change policies. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Hallegatte, Stephane |
| author_facet |
Hallegatte, Stephane |
| author_sort |
Hallegatte, Stephane |
| title |
How Economic Growth and Rational Decisions Can Make Disaster Losses Grow Faster Than Wealth |
| title_short |
How Economic Growth and Rational Decisions Can Make Disaster Losses Grow Faster Than Wealth |
| title_full |
How Economic Growth and Rational Decisions Can Make Disaster Losses Grow Faster Than Wealth |
| title_fullStr |
How Economic Growth and Rational Decisions Can Make Disaster Losses Grow Faster Than Wealth |
| title_full_unstemmed |
How Economic Growth and Rational Decisions Can Make Disaster Losses Grow Faster Than Wealth |
| title_sort |
how economic growth and rational decisions can make disaster losses grow faster than wealth |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110329162349 http://hdl.handle.net/10986/3384 |
| _version_ |
1764386895321628672 |