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Abstract
Increased uninsured damage and economic costs resulting from catastrophic disasters underscore the significance of flood insurance programs. However, concerns arise regarding the program’s fiscal soundness amidst efforts to bolster it through premium increases. In this context, unlike previous studies built on the Expected Utility (EU) framework, we explore the use of the revealed preference method to identify factors influencing individuals’ decisions to purchase flood insurance. Our analysis reveals individuals' risk awareness, expected loss, anticipatory emotion(worry), and previous flood experience significantly influence their likelihood of purchasing flood insurance. Notably, we find an asymmetric relation between wealth and flood insurance uptake: homeowners in the middle wealth bracket exhibit a higher likelihood of remaining uninsured, while those in the highest bracket are more likely to be insured. Conversely, we find a monotonic relationship between income and insurance purchases. Furthermore, we find elevation from the sea level and distance from the ocean as indicative of a self-insurance mechanism, while mortgage requirement exerts an opposing effect.