BENEFIT MEASUREMENT BY OBSERVING INDIVIDUAL ANTI-DISASTER PREVENTION BEHAVIOR

Abstract

All the manuals of cost benefit analysis for anti-disaster prevention projects measures its benefit by the expected value of damage reduction. However, the expected value is not an appropriate measure because people are not neccessarily risk neutral nor there is perfect insurances. In order to enhance the confidence on the benefit value estimation, this study removes the availavility of perfect insurance and the observability of utility function, both of which are not realistic. This paper proposes the benefit measurement technique by observing the change of indivisual anti-disaster prevention investment behavior appeared as a result of public anti-disaster prevention projects. Since we can observe those behavior, it could be said that the technique proposed in this paper is practically useful.