Quantitative Sustainable Economics and Finance 
Time: 10.00 am
Date:22th of January 202
Room 3049

Pauline CHIKHANI (Université de Lausanne ) “Climate Protection Gap and Private Self-Insurance”

Abstract : How effective is self-insurance against climate risk for households? I study this question using a heterogeneous-agent model in which households face idiosyncratic capital depreciation shocks from natural disasters. Households live in “climate zones” that differ in terms of shock frequency and severity. I estimate the shocks and the Markov transition matrix over climate zones using U.S. county-level measures of disaster-induced capital depreciation. I use this framework to study how climate change, modeled as an increase in the probability of transitioning toward riskier climate zones, shapes precautionary savings and wealth dynamics under incomplete markets.

Organizers:  Patricia Crifo, Emmanuel Gobet, Peter Tankov, Gauthier Vermandel, and Olivier David Zerbib

Sponsors:
CREST-CMAP