Abstract
This paper proposes a methodology to valuate mental damage in a flood disaster with CVM and covariance structure models. The mental damage which the victims receive in a flood disaster is essentially unobservable. Hence, the set of mental damage are expressed as quantitative variables in the form of structural concepts, which are used as explanatory variables of victims' utility function in order to measure their mental damage. The structural concepts of mental damage are regarded as outputs of the psychological production structure of stresses, which is modeled by a covariance structure model. The applicability of the methodology presented in this paper is investigated by an application example.
