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Wednesday, August 4 • 9:00am - 10:30am
6E2 Climate Change and Demand for Insurance: Evidence from the US Homeowners Insurance

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Tao Sun, Lingan University

Climate change imposes serious risks on our society. This study aims to investigate whether and to what extent beliefs regarding climate change will affect the demand for insurance. Using the US homeowners insurance market between 2003 and 2017, we document a positive relationship between belief regarding climate change and demand for homeowners insurance. That is, a one-standard-deviation increase in the level of worry about global warming will result in a 4.17% increase in homeowners insurance coverage. Similarly, a one-standard-deviation increase in the belief that global warming causes personal harm will lead to a 4.47% increase in homeowners insurance coverage. Our results suggest that the increased risk management cost for climate change risk may serve as an alternative mechanism to explain climate change’s impacts on house prices. Keywords: climate change, insurance demand, risk perception, homeowners insurance


Yu Lei

Barney School of Business, University of Hartford


Tao Sun

Lingnan University

Wednesday August 4, 2021 9:00am - 10:30am EDT