The Study On Willinness To Purchase Earthquake Insurance

In2013, there were308disaster events, of which150were natural catastrophes and158man-made. Almost26000people lost their lives or went missing in the disasters. The total economic losses from natural catastrophes and man-made disasters were around USD140billion last year. Insured losses were roughly USD45billion last year. Of the total, natural catastrophes generated USD37billion of losses, and man-made disasters the other USD8billion in claims.1Making our modern life more convenience and more vulnerable because of the development of social economy, growth in the living standard, the abundant of media information, the advanced science and technology. The use of nuclear energy is not only bringing clean energy but also the shadow of nuclear leak. Genetic technology is not only optimizing of the genetic code but also rejected by the public due to the unknown influence. The earthquake is not only making giant losses of human and property but also difficult to management of post-disaster. The advanced science and technology could detect the trace hazardous substance, so the first and foremost factor, which impacts the pubic appraisal risk and decide how to do, is the information. The public and the experts have a huge difference in risk appraisal and perception. It is cannot make the public to take measures based on the instrument rationality or probabilistic forecasting in risk judgment. And it does not neglect that the trust of information resources and the content, that will impact the public who are lacked of knowledge of disasters.Traditional economics research human’s choice under the constraints of limit resource, and also pay a lot of attentions on the preference behind the choice. As the assumption of rational agent with reality challenge, a growing number of studies began to focus on the black box of preference behind the problem, cognitive neuroscience, Neuroeconomics or brain nerve in emerging interdisciplinary studies. The catastrophes such as meteorological disasters, geological disasters, terrorist attacks and nuclear leaking shock the vulnerable rational-economic man. The public’s reaction and preparation to the urgent events become the key issues in the risk society. Crisis is real and the risk is construal. Risk perception is individual’s subjective feeling and understanding to the external various kinds of real crisis. After the shock of catastrophes, the individual’s coping behavior especially the decision of risk will be changed with the risk perception. And which is proved in Psychology and Sociology, but little studies on the prospect of economic and insurance demand.The ability of predict the Individual’s decision-making of economic behavior become weaken under the classical expected utility theory, with the prospect of Psychology and Sociology, this thesis studies Individual’s process of decision-making of Minimum probability of great loss risk based on the Bounded rationality.At first this article inducts and cards the definition of risk, analyze the risk’s objective attribute and social attribute, and then study the risk communication’s transmitter, carrier and channels based on social amplification of risk framework. It does not be ignored that the role of risk communication in reshaping the risk perception and earthquake disaster management, and risk communication had developed form risk information one-way transmission to the interactions between different interest groups. It is the key points of this article concern that how the trust and information impact and reshape the earthquake risk perception and the dimensions of risk perception, and trust is the basis and information is the carrier of effective risk communication. The individual’s risk appraisal is not only related to the urgent events and catastrophes risks’ objective attribute, such as the probability and severity, the emotion state, the experience, risk knowledge and risk communication also influence the risk perception. So this article studies the variables, which impact the risk perception dimensions by questioners and empirical research methods. As part of the cognition of coping behavior, the following of this article analyze the cognitive of insurance, the Insurance contacting channels and channels’reliability impact on the willingness to purchase the earthquake. Earthquake risk perception is the pivot linked the real threat and the coping behavior, which is the individual’s subjective appraisal of earthquake. And based on the research conclusions and coping behavior models, the author establish the transmission path from earthquake and willingness to purchase, after that the author prove the path by theoretical model, microscopic investigation and macroeconomic data. The specific details of this article as follows:The chaper0introduces the background of this selected topic, the research significance and the the technology roadmap of this reseach, and at last of this chapter summeriazed the advantages and disadvantages. Chapter1mainly review the studies of eqthquake risk perception and willingness to purchase eqrthquake insurance in such parts, risk perception and its’ dimensions, risk communication and perception, eqthquake risk perception and coping behaviors and the demand of earthquake insurance.Chapter2The basic definition and theriotical basis.In this chapter the authour firstly listing the definition of risk, classification and it’s connotation in different areas, secondly analyzing the objective and social attributes on the basis above and defining the conception of risk in this thesis, discussing the media, carrier and channels of risk communication. The following the explanation of earthquake risk perception and comparing the difference between that and everydaylife risk perception. The last of this chapter is the defintion of willingness to purchase earthquake isnurance. The following parts of this chaper is the theriotical basis such as bounded rational, risk communicaiton and risk management.Chapter3The analysis of earthquake risk perception. This chapter studies the distance between original earthquake, the earthquake experience, losses in the earthquake and demographic variables influence on the earthquake risk perception by statistics methods such as mean test, one-way analysis of variance, The mean difference test and discriminant analysis. Then the author extracts four factors of earthquake risk perception dimensions by Factor analysis, which are subjective probability, dread, control and impact. The founding of this chapter in last part is that the factors subjective probability, dread, and impact have the positive influence path coefficient and control has the opposite relationship by Structural equation model.Chapter4Risk communication and Earthquake Risk Perception。The beginning of this chapter show the result of the subject who supply earthquake information and the information’s degree of objective and preference contents of the information, and form the questionnaire the author find that the public have a relative low trust of government department and earthquake experts but have a high trust of TV and broadcast and Internet. From the questionnaire we also find that the public think the information supplied by government department and earthquake experts is tend to exaggerate, and other parties have the opposite result. Then we add the three trust dimensions be extracted by factors analysis into the SEM which established and proved in last chapter, the result of model fitting show that Trust of Authority and Trust of Media can lower the level of Earthquake Risk Perception, but the Trust of Relationship can enhance the level of Earthquake Risk Perception. The last part of this Chapter study the contents of earthquake information and the degree of awareness’ impact on the Earthquake Risk Perception, which have the same conclusion like the above analysis.Chapter5The transmission mechanism of Earthquake Risk Perception and Willingness to Purchase Earthquake Insurance. After review the coping behavior models and find the generality of these models, the author establish the transmission path between earthquake shock, Earthquake Risk Perception and willingness to purchase. In this path, the individual be shocked by the earthquake, the trust and information influence the risk perception by the directive experience, the communication with others and SARF, which reshaped in the four dimensions. At the third step individual make subjective appraisal linked by risk perception and make decision of willingness to purchase. Then the transmission path is proved by theoretically。Chapter6Earthquake Risk Perception and Willingness to Purchase Earthquake Insurance-Based on the questionnaire data. Based on the transmission path established in the last chapter, at beginning this chapter constructs the reality model of Earthquake Risk Perception and Willingness to Purchase Earthquake Insurance, which proved by the questionnaire data. By the PTC model, SEM’s result shows that Earthquake Risk Perception has positive influence path coefficient on WTP, Trust of Authority and Cognitive of insurance have the same conclusion, but the Trust of Relationship have negative influence on WTP. The PT Model which constraints of cognitive of insurance have the same result with PTC Model, and the similarity with PW model which is only consist of Earthquake Risk Perception and WTP.Chapter7Earthquake Risk Perception and Willingness to Purchase Earthquake Insurance-Based on the macroeconomics data. In this chapter the author uses the macroeconomics data after Wenchuan Earthquake to verify the result we had in the last chapter. Because of the lack of insurance product in the mainland of our country, this chapter uses the increase of property insurance reflecting the earthquake insurance demand. And also have the same conclusion with the SEMs by using the multiple linear regression model.Chapter8Research conclusions and policy recommendations. This chapter summarize the research conclusions and give some policy recommendations form risk communication, risk perception and demand of earthquake insurance based on the research conclusions.This research based on the bounded rational, borrowing psychology research paradigm, using the method of questionnaire survey, analyzing the factors of earthquake, studying risk communication influences and reshapes the risk perception, establishing and finding the transmission path of Earthquake risk perception and willingness to purchase insurance. This thesis studied the demand of insurance in the behavior economics prospective innovatively, which could us know more deeply. It is Inevitable and unavoidable that risk communication influence and reshape the risk perception in risk society, so effective communication is important for risk management for individual, organization and society. And we also know that trust is the precondition and the foundation of the effective risk communication, especially when the public is lack of knowledge of disasters, from this point the thesis found the three dimensions of trust innovatively will be helpful. At last and the most important is that this thesis establishes and proves the transmission path between earthquake shock, Earthquake Risk Perception and willingness to purchase innovatively, that gives us a new prospective and more deeply for studying of demand of insurance.