Howard Charles Kunreuther (November 14, 1938 – August 1, 2023) was an American economist. He was the
James G. Dinan professor emeritus
''Emeritus/Emerita'' () is an honorary title granted to someone who retirement, retires from a position of distinction, most commonly an academic faculty position, but is allowed to continue using the previous title, as in "professor emeritus".
...
of
decision sciences
Decision theory or the theory of rational choice is a branch of probability theory, probability, economics, and analytic philosophy that uses expected utility and probabilities, probability to model how individuals would behave Rationality, ratio ...
and
public policy
Public policy is an institutionalized proposal or a Group decision-making, decided set of elements like laws, regulations, guidelines, and actions to Problem solving, solve or address relevant and problematic social issues, guided by a conceptio ...
at the
Wharton School of the University of Pennsylvania
The Wharton School ( ) is the business school of the University of Pennsylvania, a private Ivy League research university in Philadelphia. Established in 1881 through a donation from Joseph Wharton, a co-founder of Bethlehem Steel, the Wharton ...
.
Background
Howard Charles Kunreuther received an A.B. in economics from
Bates College
Bates College () is a Private college, private Liberal arts colleges in the United States, liberal arts college in Lewiston, Maine. Anchored by the Historic Quad, the campus of Bates totals with a small urban campus which includes 33 Victorian ...
, and a
PhD
A Doctor of Philosophy (PhD, DPhil; or ) is a terminal degree that usually denotes the highest level of academic achievement in a given discipline and is awarded following a course of graduate study and original research. The name of the deg ...
in the same subject from the
Massachusetts Institute of Technology
The Massachusetts Institute of Technology (MIT) is a Private university, private research university in Cambridge, Massachusetts, United States. Established in 1861, MIT has played a significant role in the development of many areas of moder ...
. He was a
fellow
A fellow is a title and form of address for distinguished, learned, or skilled individuals in academia, medicine, research, and industry. The exact meaning of the term differs in each field. In learned society, learned or professional society, p ...
of the
American Association for the Advancement of Science
The American Association for the Advancement of Science (AAAS) is a United States–based international nonprofit with the stated mission of promoting cooperation among scientists, defending scientific freedom, encouraging scientific responsib ...
, and a distinguished fellow of the
Society for Risk Analysis
The Society for Risk Analysis (SRA) is a learned society providing an open forum for anyone interested in risk analysis. SRA seeks to:
* Bring together individuals from diverse disciplines and from different countries and provide them opportunit ...
.
His research focuses on managing and financing losses due to technological and natural hazards such as high-level radioactive waste repositories, and extreme events such as climate change, terrorism, earthquakes, floods, and hurricanes.
Howard Kunreuther died on August 1, 2023, at the age of 84.
Research
Interdependent Security
In an interdependent world, the risks faced by any one agent depend not only on its choices but also on those of others. One weak link in a system can cause large losses to others. An example is the bombing of
Pan Am Flight 103
Pan Am Flight 103 (PA103/PAA103) was a regularly scheduled Pan Am transatlantic flight from Frankfurt to Detroit via a stopover in London and another in New York City. Shortly after 19:00 on 21 December 1988, the Boeing 747 "Clipper Maid of th ...
in 1988: the bomb was loaded onto a plane at a low-security airport in Malta and transferred to Pan Am 103 where it was set to explode when the plane was 25,000 feet in the air.
Guiding Principles for Insurance
* Insurance premiums should be based on risk in order to provide signals to individuals as to the hazards they face and to encourage them to engage in cost-effective mitigation measures to reduce their vulnerability to catastrophes.
* Affordability of insurance for low-income residents is an important concern if premiums rise to a level that low-income residents cannot afford. Kunreuther has proposed a mechanism whereby low-income homeowners could receive a voucher to cover the costs of protecting their property.
The Behavioral Risk Audit
It is important to understand why people often do not purchase insurance voluntarily. When dealing with uncertain and risky events, individuals tend to be myopic, optimistic and to prefer the status quo. A behavioral risk audit addresses these cognitive biases so that individuals are more likely to pay attention to the potential consequences of low-probability events. Remedial solutions are proposed that work ''with'' rather than ''against'' people's risk perceptions and decision biases. When combined with short-term economic incentives, individuals are likely to consider investing in protective measures that reduce the potential consequences of future catastrophic events.
[Meyer, R., & Kunreuther, H. (2017).]
''The Ostrich Paradox: Why We Underprepare for Disasters''
Wharton School Press, 2017.
Books
* Kunreuther, H., Meyer, R. J., & Michel-Kerjan, E. O. (Eds.). (2019)
''The Future of Risk Management.''University of Pennsylvania Press. .
* Kunreuther, H., & Useem, M. (2018)
''Mastering Catastrophic Risk: How Companies Are Coping with Disruption.''Oxford University Press. .
* Meyer, R., & Kunreuther, H. (2017)
''The Ostrich Paradox: Why We Underprepare for Disasters.''Wharton School Press. .
* Kunreuther, H. C., Pauly, M. V., & McMorrow, S. (2013)
''Insurance and Behavioral Economics: Improving Decisions in the Most Misunderstood Industry.''Cambridge University Press. .
* Kunreuther, H. C., & Michel-Kerjan, E. O. (2011)
''At War with the Weather: Managing Large-scale Risks in a New Era of Catastrophes.''MIT Press. . Winner of the 2011 Kulp-Wright Book Award, presented annually by the American Risk and Insurance Association to the author of a book considered to be the most influential text published on the economics of risk management and insurance.
* Daniels, R., Kettl, D., & Kunreuther, H. (2006)
''On Risk and Disaster: Lessons from Hurricane Katrina.''.
* Grossi, P., & Kunreuther, H. (2005)
''Catastrophe Modeling: A New Approach to Managing Risk (Vol. 25).''Springer Science & Business Media. .
* Kunreuther, H. C., & Hoch, S. J. (2001)
''Wharton on Making Decisions.''John Wiley & Sons, Inc. .
* Kunreuther, Howard, and Richard J. Roth. (1998)
''Paying the Price: The Status and Role of Insurance against Natural Disasters in the United States.''Washington, D.C.: Joseph Henry Press. .
* Easterling, D., & Kunreuther, H. (2013)
''The Dilemma of Siting a High-level Nuclear Waste Repository (Vol. 5).''Springer Science & Business Media. .
* Kunreuther, H., Ginsberg, R., Miller, L., Sagi, P., Slovic, P., Borkan, B., & Katz, N. (1978)
''Disaster Insurance Protection: Public Policy Lessons.''New York: Wiley. .
* Dacy, D. C., & Kunreuther, H
''The Economics of Natural Disasters: Implications for Federal Policy.''.
References
External links
Wharton ProfileWharton Risk Management and Decision Processes Center
{{DEFAULTSORT:Kunreuther, Howard
1938 births
2023 deaths
MIT School of Humanities, Arts, and Social Sciences alumni
Bates College alumni
Fellows of the American Academy of Arts and Sciences
Wharton School of the University of Pennsylvania faculty
21st-century American economists
20th-century American economists