The psychology of natural hazards: why do few people in catastrophe‐prone areas invest in risk reduction measures?
Issue brief, winter 2010:
This paper analyses how destruction from major catastrophes significantly impacts the economic well‐being of residents, businesses, local governments and general taxpayers in the United States. It points ot the reasons why people do not undertake loss‐prevention measures voluntarily, and proposes long‐term sustainable solutions to overcome myopic thinking and provide economic incentives for encouraging sound investments in risk reduction measures.
It identifies eleven psychological and situational barriers to how we make decisions under uncertainty and plan for the future and gives five measures involving insurance, loans, building codes, seal of approval and tax credits for cities, state and federal governments to encourage mitigation measures.