Integrating Household Risk Mitigation Behavior in Flood Risk Analysis: An Agent-Based Model Approach
Authored by Toon Haer, W J Wouter Botzen, Jeroen C J H Aerts, Moel Hans de
Date Published: 2017
DOI: 10.1111/risa.12740
Sponsors:
European Union
Netherlands Organization for Scientific Research (NWO)
Platforms:
NetLogo
Model Documentation:
Other Narrative
Flow charts
Mathematical description
Model Code URLs:
Model code not found
Abstract
Recent studies showed that climate change and socioeconomic trends are
expected to increase flood risks in many regions. However, in these
studies, human behavior is commonly assumed to be constant, which
neglects interaction and feedback loops between human and environmental
systems. This neglect of human adaptation leads to a misrepresentation
of flood risk. This article presents an agent-based model that
incorporates human decision making in flood risk analysis. In
particular, household investments in loss-reducing measures are examined
under three economic decision models: (1) expected utility theory, which
is the traditional economic model of rational agents; (2) prospect
theory, which takes account of bounded rationality; and (3) a prospect
theory model, which accounts for changing risk perceptions and social
interactions through a process of Bayesian updating. We show that
neglecting human behavior in flood risk assessment studies can result in
a considerable misestimation of future flood risk, which is in our case
study an overestimation of a factor two. Furthermore, we show how
behavior models can support flood risk analysis under different
behavioral assumptions, illustrating the need to include the dynamic
adaptive human behavior of, for instance, households, insurers, and
governments. The method presented here provides a solid basis for
exploring human behavior and the resulting flood risk with respect to
low-probability/high-impact risks.
Tags
Management
Insurance
England
Prospect-theory
Loss aversion
Prospect theory
Flood risk
Flood insurance
Bayesian updating
Expected utility theory
Household adaptation
Precautionary measures
Private households
Damage
mitigation
Changing climate
York-city