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Adjustment to HazardsAdjustment to Hazards((Smith, 2002: Ch 4Smith, 2002: Ch 4 ))

• factors affecting adjustment to hazard

• accepting loss

• sharing loss(emphasis in this lecture on collective adjustments)

Geography 106bGeography 106bHazardsHazards

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Three Categories of Adjustment:Three Categories of Adjustment:1) Modify Loss Burden1) Modify Loss Burden

• loss sharing• spread burden well beyond immediate

victims• e.g, insurance, relief aid

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Loss Sharing

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Three Categories of Adjustment:Three Categories of Adjustment:2) Modify Hazard Events2) Modify Hazard Events

• loss reduction• depends on good knowledge base

about the hazard – “experienced”• e.g., design, engineering• e.g., hazard resistant buildings

Source: http://www.eng.uwo.ca/research/ttlpp/

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Three Categories of Adjustment:Three Categories of Adjustment:3) Modify Human Vulnerability3) Modify Human Vulnerability

• largest category of responses• adjust people to the events• preparedness, landuse planning,

avoidance• prediction key – forecasting and

warning

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Factors Affecting Factors Affecting General Adjustment ChoicesGeneral Adjustment Choices

• hazards not typically on political “radar” – vs e.g, unemployment, inflation, crime, healthcare

• radical vulnerability adjustment unrealistic – e.g., moving whole communities

• costs of alternatives vary widely• debate - who should bear cost

• therefore: cost-benefit assessment of options required

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Role of Government?

Question• How much should

governments intervene to help absorb hazard losses – e.g., floods?

• Specifically, what “mechanisms” should they use?

• Who should pay for losses (what’s fair)?

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LossesTwo Scenarios

accepting loss - “free” choice• “no-action” response• people choose to live/act how they

want relative to hazards• e.g., floodplain housing = cheap!• assumes: people have good

information; choice is not constrained by capital (more about this next day)

share loss - government intervention• typically governments intervene once

disaster happens (re: political ramifications otherwise)

• motivated somewhat to reduce individual/community vulnerability to keep post-event costs low

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Sharing Loss

• external government aid - disaster aid (e.g., UNICEF, UNDRO, WFP)

• internal government aid• inter-community aid• commercial insurance

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Problems “Sharing Losses”

• sudden-onset draw more $• donor fatigue• golden hours critical – e.g, 90%

earthquake victims in first 24 hours 2-6 hours most critical

• recovery takes a very long time – aid/relief enthusiasm wanes in later periods

• rising costs of relief – e.g., compensating the wealthy

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Delayed Medical Relief

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General Sequence of Disaster Recovery

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Commercial Insurance

• Identify some advantages and disadvantages of commercial insurance for hazard losses.

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Commercial Insurance

Advantages

• predictable compensation

• private market driven

• potential equitable distribution of costs (if data good)

• encourage mitigative measures for policy holders = reduced risk

Disadvantages

• mainly a solution for MDCs

• unobtainable in high risk areas

• low uptake of hazard insurance

• potential inequitable distribution of costs

• moral hazard problem unduly raises premiums

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Factors Affecting Factors Affecting Individual Adjustment ChoicesIndividual Adjustment Choices

ExampleExample

• Assuming adjustment to hazard has something to do with the perception of hazard frequency – what do you feel is the probability (0.0 = 0% chance; 1.0 = 100% chance) of each of the following natural hazards occurring in London over the next 50 years?– Tornado

– Hurricane

– Flood

– Debilitating Ice Storm

– Major Blizzard

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Factors Affecting Factors Affecting Individual Adjustment ChoicesIndividual Adjustment Choices

Experience and Probability EstimatesExperience and Probability Estimates

Londoners underestimate

Londoners overestimate

Londoners underestimate

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Factors Affecting Factors Affecting Individual Adjustment ChoicesIndividual Adjustment Choices

Experience and Probability EstimatesExperience and Probability Estimates

Londoners underestimate

Londoners overestimate

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Factors Affecting Factors Affecting Individual Adjustment ChoicesIndividual Adjustment Choices

• experience – more experience = more likelihood of adjustment

• material wealth – including capital, resources (e.g., information) – wider range of options

• personality – risk taker? confidence in the future (see risk perception lecture)

• type of hazard – dreaded? (see risk perception lecture)

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Prospect Theory

• In each example, which option do you do you prefer:

1) a) 0.01 probability of gaining $1000 dollars;b) 0.99 probability of gaining $100.

2) a) 0.01 probability of losing $1000 dollarsb) 0.99 probability of losing $100.

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Losses “Valued” More

• generally people are much more willing to do something to protect against loss than they are willing to gamble on an equivalent gain