Attitudes toward Flooding Risks in Vietnam: Implications for Insurance

by Truong Cong Thanh Nghi

This study used the experimental method to elicit abstract risk attitudes on and preferences for uncertainties based on the context of flooding in the Mekong Delta, Vietnam. In contrast to the common assumption that farmers are risk averse, our results showed that farmers are, on the average, risk neutral. Moreover, although farmers are ambiguity averse toward Ellsberg-type uncertainty, they are not averse to flooding uncertainty. We also found that farmers systematically underestimate the probability of flooding. The results of the study provide possible explanations for the low take-up of insurance.

  • Publication Year: 2016
  • Country: Vietnam
  • Research Area: Behavioral Economics and Social Capital
  • Research Topic: Mitigation
  • Analytical Framework: Behavioral/Experimental Economics
Economy and Environment Program for Southeast Asia