Essays on the Private Defensive Strategies against Storm Damages given the Presence of Public Programs and Natural Storm Protection Barriers

This dissertation primarily examines two key issues in order to provide solutions to the government to properly protect its coastal communities from storm-inflicted property damages and associated health-related problems as a result of intense and frequent major storm events due to global climate change. The two key issues are: (1) whether public protection programs in terms of public disaster relief and rehabilitation have the potential to partially or fully crowd out private storm protection actions; and (2) whether living in close proximity to a natural storm protection barrier such as the mangrove forests lowers private storm protection actions.;The first part of this research (Chapter 1) introduces a household model of ex-ante private investment with an endogenous risk framework where the households choose the level of private storm protections against ex-post storm-inflicted property damages given the presence of public programs and a mangrove forest. Findings from the theoretical model reveals four behavioral patterns a household might follow to reduce the likelihood and severity of facing storm-related monetary losses or damages to property. Under certain restrictions, comparative static analyses of the model shows possible influence of public programs and mangrove forests on a household's private storm protections. The second part of this dissertation (Chapter 2) applies the model empirically based on a household survey in the southwest coastal areas of Bangladesh. Results from the empirical analyses also show evidence of the influence of public programs and the mangroves on a household's private storm protection actions. However, other controls tend to have a considerable influence and add a degree of complexity to the relationships. Chapter 3, the last part of this research, combines a household's health production function with an endogenous risk framework to examine whether public disaster relief programs and a mangrove forest influence a household's willingness to pursue private actions to protect the health of its members from a future cyclone. It also theoretically derives and empirically estimates the households' ex-ante marginal willingness to pay for an increase in public insurance programs and greater storm protection from mangroves.