The economics of flood insurance

Thiscourse shows how some of the theories and tools of economics can be applied tounderstanding and tackling the problem of flood risk in the UK. With theincidence of flooding rising due to climate change, this is an increasinglyimportant policy issue worldwide. You will gain insights into the practical useof economics in a policymaking setting.This OpenLearn course provides a sample of Level 2 study in Economics.

• Introduction
• Learning outcomes
• 1 Why flooding happens
• 1 Why flooding happens
• 1.1 What is Flooding?
• 1.2 Flood risk management
• 1.3 Flooding in the UK
• 2 Building on flood plains
• 2 Building on flood plains
• 2.1 Demand factors: why buy homes in flood plains?
• 3 Competitive markets and market failure
• 3 Competitive markets and market failure
• 3.1 The functioning of markets
• 3.2 Individual choices
• 3.3 The demand-and-supply model
• 3.4 Market failure and building on flood plains
• 3.5 Market failure and buying on flood plains
• 4 Options for reducing building on flood plains
• 4 Options for reducing building on flood plains
• 4.1 How might building on flood plains be reduced?
• 4.2 Compensation through insurance
• 4.3 Potential problems with insurance
• 5 The UK approach to the problem of flooding
• 5 The UK approach to the problem of flooding
• 5.1 Problems with affordable flood insurance
• 5.2 A surprising solution
• 5.3 Weighing up the options
• 5.4 Taking fairness into account
• 5.5 Measuring the equity benefit
• 5.6 The government’s policy decision
• 6 Conclusion
• 6 Conclusion
• Glossary
• References
• Acknowledgements