Quantifying factors giving rise to temporal variation in forest fires is important for advancing scientific understanding and improving fire prevention. We demonstrate that eighty percent of the large year-to-year variation in forest area burned in California can be accounted for by variation in...

Catastrophic risk is currently a hotly debated topic. This paper contributes to this debate by showing two results. First it shown that the value function in dynamic optimization can have an infinite derivative at some point even if the model specification has functional forms that are finite...

This paper aims to investigate rare natural disasters and studies adaptation decisions in a dynamic stochastic economy. We examine the optimal balance between investment in productive capital and adaptive capital stock, which is inherently non-productive but alleviates the damage caused by a...

A big challenge for the economic development of small island countries is dealing with external shocks. The Pacific Islands are vulnerable to natural disasters, climate change, commodity price changes, and uncertain donor grants. The question that arises is how should small developing countries...

Catastrophic wildfires in California have become more frequent in past decades, while insured losses per event have been rising substantially. On average, California ranks the highest among states in the U.S. in the number of fires as well as the number of acres burned each year. The study of...

Disaster risk and subsequent loss and damage in Asia are increasing at an alarming rate, threatening socioeconomic gains. Arresting this rapid increase in exposure requires risk-informed development and urban planning - a challenging proposition complicated by multiple economic and political...

Cummins, Doherty, and Lo (2002) present a theoretical and empirical analysis of the capacity of the property liability insurance industry in the U.S. to finance catastrophic losses. In their theoretical analysis, they show that a sufficient condition for capacity maximization is for all insurers...

Catastrophe insurance markets have changed beyond recognition since the sudden upturn in claims beginning in 1966. There is now a growing tendency for risk manager to bypass traditional insurance markets, and a variety of instruments designed directly to transfer risk to the financial markets....

Environmental disasters are thought to increase the focus on corporate sustainability in the communities where they occur. Extracting data on wildfires (a frequent type of disaster in the U.S.) and using ESG ratings and EPA air enforcement actions to construct measures of local corporate...

Robo-advisors provide investors with automated portfolio management services, and their growth is unprecedented. They performed less well during the COVID-19 pandemic than they had done during the non-crisis period. That less satisfactory performance was due to the fact that rare disasters are...