Insights from a Stated Preference Experiment of Florida Residents: Role of Information and Incentives in Hurricane Risk Mitigation

Abstract

For decades, Florida residents have lost billions of dollars in property damage because of wind and wind-driven rainwater intrusion from tropical cyclones. Engineers and scientists have demonstrated that future losses can be reduced significantly with practical resilience-enhancing mitigation measures. The role of policy makers therefore is to design successful strategies that will result in the adoption of approved mitigation measures by homeowners. The rational design and delivery of vulnerability information and mitigation options are a critical part of such programs. Confronting and overcoming the significant upfront costs of mitigation with novel financing mechanisms is essential as well. To maximize the use of constrained funding allocated for resilience policies, this paper explores the effectiveness of vulnerability information and financial assistance programs to facilitate mitigation using online survey responses from households across Florida. The survey is designed to test preferences for low- and high-cost roofing and opening protection measures to reduce hurricane-related damages in the context of information and incentive treatments. Empirical analysis indicates that financial incentives are preferred to vulnerability information to foster mitigation.