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Factors affecting flood insurance purchase in residential properties in Johor, Malaysia

Aliagha, Uche Godwin and Jin, T. E. and Choong, Weng Wai and Jaafar, M. Nadzri and Mohd. Ali, Hishamuddin (2014) Factors affecting flood insurance purchase in residential properties in Johor, Malaysia. Natural Hazards and Earth System Sciences, 14 (12). pp. 3297-3310. ISSN 1561-8633

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Official URL: https://dx.doi.org/10.5194/nhess-14-3297-2014

Abstract

High-impact floods have become a virtually annual experience in Malaysia, yet flood insurance has remained a grossly neglected part of comprehensive integrated flood risk management. Using discriminant analysis, this study seeks to identify the demand-side variables that best predict flood insurance purchase and risk aversion between two groups of residential homeowners in three districts of Johor State, Malaysia: those who purchased flood insurance and those who did not. Our results revealed an overall 34% purchase rate, with Kota Tinggi district having the highest (44%) and thus the highest degree of flood risk aversion. The Wilks' lambda <i>F</i> test for equality of group means, standardised discriminant function coefficients, structure correlation, and canonical correlation has clearly shown that there are strong significant attribute differences between the two groups of homeowners, based on the measures of objective flood risk exposure, subjective risk perception, and socio-economic cum demographic variables. However, the measures of subjective risk perception were found to be more predictive of flood insurance purchase and flood risk aversion.

Item Type:Article
Uncontrolled Keywords:flood, homeowner, insurance system, residential location, risk perception
Subjects:H Social Sciences > HD Industries. Land use. Labor
Divisions:Geoinformation and Real Estate
ID Code:52852
Deposited By: Siti Nor Hashidah Zakaria
Deposited On:01 Feb 2016 03:54
Last Modified:19 Jul 2018 07:18

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