Are Private Defensive Expenditures against Storm Damages Affected by Public Programs and Natural Barriers? Evidence from the Coastal Areas of Bangladesh

This paper introduces a theoretical model combining household production with an endogenous risk framework in order to understand how ex-ante private spending by coastal households would evolve against ex-post cyclone induced storm surge damage risk given the level of government protective spending and the presence of a mangrove forest. The theoretical model confirms the influence of public protection programs and the mangrove forest on private defensive expenditures depending on whether the public programs serve as a possible stochastic substitute or a stochastic complement to the storm protection provided by the mangroves. [SANDEE Working Paper No. 54-10] URL: [http://www.sandeeonline.org/uploads/documents/publication/899_PUB_Working_Paper_54_Sakib_Mahmud.pdf]