We depart from these conventional approaches by directly testing whether loss-control activities at the household level are associated with greater insurance demand.
Following the Great East Japan Earthquake in March 2011, several households newly purchased earthquake insurance and conducted additional loss-control activities, again especially at high income levels.
In Section IV, we provide descriptive statistics on the household earthquake insurance demand and loss-control activities before or after the Great East Japan Earthquake.
In general, most of these studies have focused on whether loss-control activities at the community level promote insurance demand.
On average, Japanese households have not significantly changed their insurance purchase behavior, and rationally purchase earthquake insurance and conduct household loss-control activities even after the earthquake (Figure 4, B-2).
Figure 4 indicates some interesting tendencies concerning loss-control activities undertaken in light of earthquakes, including earthquake resistance checks and reinforcement work and/or reconstruction.
However, this does not exclude the possibility that persons who have anticipated the complete loss of a house may have already conducted loss-control activities such as seismic retrofitting and/or have saved funds to rebuild the house in the contingency of its damage or destruction.
Nevertheless, we could not find the correlation between the loss-control activities and earthquake insurance purchase.
In this paper, we attempt to investigate household insurance purchase and loss-control activities in the context of earthquake risk management by analyzing a survey of Japanese households conducted two years after the Great East Japan Earthquake.