Insuring Well-being: Psychological Adaptation to Disasters [post]

Sunbin Yoo, Yuta Kawabata, Junya Kumagai, Shunsuke Managi
2021 unpublished
We examine the impact of life and health insurance spending on subjective well-being. Taking advantage of insurance spending and subjective well-being data on more than 700,000 individuals in Japan, we examine whether insurance spending can buffer declines in subjective well-being due to exposure to mass disaster. We find that insurance spending can buffer drops in subjective well-being by approximately 3–6% among those who experienced the mass disaster of the great East Japan earthquake.
more » ... tive health increases the most, followed by life satisfaction and happiness. On the other hand, insurance spending decreases the subjective well-being of those who did not experience the earthquake by approximately 3–7%. We conclude by monetizing the subjective well-being loss and calculating the extent to which insurance spending can compensate for it. The monetary value of subjective well-being buffered through insurance spending is approximately 33,128 USD for happiness, 33,287 USD for life satisfaction, and 19,597 USD for subjective health for a person in one year. Therefore, we confirm that life/health insurance serves as an ideal option for disaster adaptation. Our findings indicate the importance of considering subjective well-being, which is often neglected when assessing disaster losses.
doi:10.21203/rs.3.rs-874349/v1 fatcat:h6z7fecdnvcplm7egyss72kegu