Determinants motivating the adoption of seismic adjustments in moderate earthquake zones: earthquake experience and willingness to pay for retrofit and insurance

Abstract

Korea has been known as one of the least prone countries to earthquake hazards throughout the world. However, two moderate earthquakes recently struck in Gyeongju and Pohang, which led people to raise awareness of the preparedness actions to some extent. Since Korea is not a country where generally experiences powerful earthquake activities, it is still low in demands for adopting seismic adjustments. It is hence important to identify determinants which influence earthquake preparedness actions and to reflect those with supportive policies in the future. When natural disasters like earthquakes occur, damages would follow. It is difficult to fully compensate all the damages at the national level. Accordingly, it is important to build up the preparedness at a household level. This study examines how earthquake experiences in moderate seismic regions influence risk perception and attitude toward preparedness and identifies determinants of seismic adjustment adoption with willingness-to-pay (WTP) approach. The results showed that dread as risk perception, detached housing ownership, earthquake experience, and income significantly influence WTP for both adjustments. However, the most interesting finding pointed out that the more earthquake experience, the lower the WTP for seismic adjustments, which situation can be regarded as normalcy bias. This suggests that Koreans most likely do not recognize earthquake can bring catastrophic damages since the country has been hitherto experienced only for a small and moderate magnitude of earthquakes. With clear understanding of earthquake consequences and timely instructions, people will allow themselves to overcome normalcy bias and prepare for suitable adjustment.