Academic journal article The South East Asian Journal of Management

RISK PERCEPTION AND ECONOMIC VALUE OF DISASTER MITIGATION: Case of Bantul Post Earthquake May 2006

Academic journal article The South East Asian Journal of Management

RISK PERCEPTION AND ECONOMIC VALUE OF DISASTER MITIGATION: Case of Bantul Post Earthquake May 2006

Article excerpt

(ProQuest: ... denotes formulae omitted.)

Indonesia is situated geographically and geologically in three actively moving tectonic plates: (1) Eurasia plate in the north, (2) Indo Australia-Oceania plate in the south, and (3) Pacific plate in the east (BNPB, 2004; Murjaya, 2007). The constant motion of these three slabs would cause frequent earthquakes. Due to its severe consequences, the disaster risk of Earthquakes would be catastrophic even though the probability might be low. Thus anticipative actions must be done in order to mitigate the risk of this disaster. Since it is impossible to reduce the hazard level, therefore the feasible course of action would be to develop people's capacity to respond or to reduce the vulnerabilities to the disaster. The efforts to improve capacities and/or to reduce vulnerabilities would needed good cooperation between the government and the communities.

The government would not be able to solve disaster problems without involving the active participation of the communities. One major problem in risk management was the potential difference of perception and understanding among the communities. Empirical studies that had been conducted on the subject can be grouped into two different conclusions. The first group was Ozdemir (2000); Ozdemir and Kruze (2005); Fujimi and Tatano (2006); Li and Hsiu (2007), who found that communities tended to be unaware towards disasters. Being aware towards disaster meant that the communities considered current disaster risk. Meanwhile, the second group argued on the contrary (Schade, et al. 2001; Miller, et al. 2002; Kunreuther, 2006) that when communities attempts to reduce potential risk, they are willing to mitigate for losses in the future. These findings are consistent with the expected utility theory.

The often emerge problem was that the comprehension and awareness of communities to conduct disaster's mitigation are heterogeneous. Perception formed in each community was supposed to affect behavior of communities to perform disaster mitigation. This was a challenge that must be faced to implement disaster risk management both in the developed countries as well as in the developing countries like as Indonesia.

This study aims to offer comprehensive analysis to the investigation of the relationship between disaster risk perception and the mitigation behavior by combining the analysis with threat description level, vulnerability, and ability to mitigate disaster. Mitigation behavior examined specifically in this study is the Willingness to pay for the mitigation efforts. Communities who lived in vulnerable regions should have higher Willingness to pay (WTP) than those who lived in less vulnerable regions. WTP in this case means the willingness to spend more money to mitigate earthquake risk. In the case of Bantul regency, for example, WTP is willingness to strengthen of their physical house to withstand earthquakes.

There are three main factors why research was conducted in Bantul. First, even though it is only a hefty 6.2-magnitude quake, the shallow depth of 10 kilometers made the May 2006 Java earthquake one of the worst of the 21st century. Second, most of area in Bantul Regency is vulnerable to earthquake risk (part of rings of fire path). While the tremor and the two strong aftershocks were closest to the city of Yogyakarta, the worst damage was in the area of Bantul. An estimated 5,800 people died from the earthquake plus another 36,000 were injured. The property damage, believed to affect 135,000 homes, leaving 1.5 million people homeless. Third, earthquakes are the type of disaster which could be repeated and relatively hard to predict precisely when and where will it struck.

Therefore, this research is important to be conducted to elaborate: (1) mapping behavior of individual WTP mitigation; (2) appropriate role of government by incorporating WTP mitigation based on communities. Based on the explanations above, the research problem formulated was "to what extent regional characteristic and individual's perception towards earthquake disaster affect mitigation behavior". …

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