| Authors |
Hu |
| Journal |
Journal of Financial Economics |
| Year |
2022 |
| Type |
Published Paper |
| Abstract |
Flooding is the most costly natural disaster faced by US households, yet policymakers are puzzled by the low take-up rates for flood insurance. Leveraging novel transaction-level data, this paper studies the influence of social interactions on households' insurance decisions. I show that households increase flood insurance purchases by 1-5 percent when their geographically distant friends are exposed to flooding events or to campaigns for flood insurance. These exogenous shocks to far-away friends should not affect local households' own insurance decisions except through peer effects. I provide evidence suggesting that social interactions facilitate learning through information dissemination and attention triggering. |
| Keywords |
Flood insurance, social learning, peer effects, social networks |
| URL |
https://www.sciencedirect.com/science/article/pii/S0304405X22000563 |
| Tags |
Archival Empirical |
Consumer Decisions
|