Test of the Expected Utility Model: Evidence from Earthquake Risks, A
journal contributionposted on 01.01.1985, 00:00 authored by D. S. Brookshire, M. A. Thayer, John T. Tschirhart, W. D. Schulze
The purposes of this paper are twofold. The first is to demonstrate that the expected utility hypothesis is a reasonable description of behavior for consumers who face a low-probability, high-loss natural hazard event, given that they have adequate information. The second is to demonstrate that in California information non earthquake hazards was generated by a 1974 state law that created a market for safe housing that previously did not exist.