Determinants of insurance demand against forest fire risk: Evidence from French experimental data

This paper analyses the willingness-to-pay (WTP) of forest owners for insurance against natural hazards such as fire. The objective is to identify the determinants of forest owner’s participation to insurance and insurance demand. In particular, we are interested in the impact of different types of public compensation: fixed help, contingent fixed help and insurance subsidy. We also analyse the role played by the expected loss of forestry income, the uncertainty characterizing the probability of occurrence of natural risks, and the characteristics of owners and forest property. Some of these determinants explain either participation to insurance (e.g., ambiguity about the probability of occurrence of natural hazards) or insurance demand (e.g., the past perception of a public help in real life), some of them do not allow to explain the owner’s insurance behaviour (e.g., having ever suffered from a fire in the past) while the other explain both the two behaviours (e.g., some types of public compensation). JEL Classification: C51, D81, Q23, Q28.