Assessing the Demand Factors for Residential Earthquake Insurance in Taiwan: Empirical Evidence on Spatial Econometrics

Abstract

This study explores a new spatial perspective to assess the factors that influences the regional consumption of residential earthquake insurance in Taiwan during 2002 to 2004. The empirical analysis supports the hypothetical determinant that income is an influence on decision to purchase residential earthquake insurance. Meanwhile, government subsidized loan is a significant factor, but are not consistent with the proposed hypothesis. From empirical data, the pooled model with spatially lagged dependent variable and with fixed spatial and time period effect is proposed to explain the demand for residential earthquake insurance in Taiwan. ( BAI2006 paper ID：6179)