Attributes-based conjoint analysis of landowner preferences for standing timber insurance

There is a growing interest in developing a standing timber insurance market because of natural catastrophes and climate change, yet private forests are rarely insured worldwide. Landowner preferences for standing timber insurance's multiple attributes are essential to study the insurance demand. We use conjoint analysis to elicit the preferences and to measure the importance and value of attribute levels. We find that insurance premium is the most relevant and important attribute, followed by insurance coverage and deductible. The willingness-to-pay for the broadest insurance coverage and the lowest deductible can be as high as $2.54 per $1000 and $1.89 per $1000, respectively. We identify four market segments corresponding to landowner preferences: (a) premium desirers who are price sensitive; (b) provider pickers who prefer government providing insurance; (c) coverage seekers who concern perils; and (d) balanced buyers who consider price, deductible and coverage equally. This study provides useful information on the demand for standing timber insurance which allows the market to design policies to better meet landowners' needs.