Abstract
In recent years, several institutional frameworks were enacted by jurisdictions in Japan, which were intended to provide some type of economic aid (compensation) to the households that are deprived of their dwellings by natural disaster and reconstruct or rent a house in the damaged region. In this paper, a dynamic model is formulated to investigate house-owners and tenants' housing choice after disaster as well as owners' insurance behavior before disaster. The effects of the subsidy system for reconstruction and lease are found such that owners in young generation are motivated to reconstruct houses in the region and tenants in elder generation choose staying in the region over emigration, while owners are discouraged from preparing for disaster with insurance.
