Munich Personal RePEc Archive

Role of Public Programs and a Natural Barrier in Relative Valuation of Households’ Storm-inflicted Health Outcomes under Optimal Private Defensive Strategies: Evidence from the Coastal Areas of Bangladesh

Mahmud, Sakib and Barbier, Edward (2014): Role of Public Programs and a Natural Barrier in Relative Valuation of Households’ Storm-inflicted Health Outcomes under Optimal Private Defensive Strategies: Evidence from the Coastal Areas of Bangladesh.

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Abstract

This paper introduces a theoretical model that allows the estimation of a household’s valuation of health risks from major storms. An endogenous risk framework is developed in which the household can employ ex-ante self-protection and ex-post mitigating activities and treatments strategies to protect against storm-inflicted health problems. Combined with a health production function, our theoretical model reveals possible estimation methods to derive households’ marginal willingness to pay to reduce health risks due to an increase in public programs and the greater storm protection role of mangroves. Results show that these marginal willingness-to-pay measures can be derived without the expected utility terms since they are a function of only prices and technological parameters. Our empirical analysis of coastal households of Bangladesh impacted by 2007 Cyclone Sidr confirms the possible influence of mangroves in reducing storm-inflicted injuries or illness. The probability of a household experiencing adverse health impacts from a major storm is higher if it has access to ex-post public disaster relief programs. However, there is no conclusive evidence of whether the likelihood of facing health impacts is higher if a household is located behind an embankment. Demographic characteristics such as age, number of females and number of children have considerable influence on the likelihood of a household facing storm-inflicted health impacts but not on medical expenditures for storm-inflicted injuries. To reduce damaging health outcomes from a major storm, results reveal that the households are willing to pay the highest amount for greater storm protection from mangroves followed by embankments and disaster relief programs.

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