Guedes, Gilvan; Raad, Rodrigo; Raad, Lucélia

doi:10.1590/0101-41614922grl

Gilvan Guedes

Professor - Departamento de Demografia e Cedeplar - Universidade Federal de Minas Gerais (UFMG). Endereço: Av. Antônio Carlos, 6627 - Pampulha - Belo Horizonte/MG - Brasil - CEP: 31270-901 E-mail: grguedes@cedeplar.ufmg.br - ORCiD: https://orcid.org/0000-0001-8231-238X.

http://orcid.org/0000-0001-8231-238X

Rodrigo Raad

Professor - Departamento de Demografia e Cedeplar - Universidade Federal de Minas Gerais (UFMG). Endereço: Av. Antônio Carlos, 6627 - Pampulha - Belo Horizonte/MG - Brasil - CEP: 31270-901 CEP: 31270-901 - E-mail: rjraad@gmail.com - ORCiD: https://orcid.org/0000-0003-3974-3517.

http://orcid.org/0000-0003-3974-3517

Lucélia Raad

Professora - Departamento de Ciências Sociais Aplicadas - Centro Federal de Educação Tecnológica de Minas Gerais - Endereço: Av. Amazonas, 5253 - Nova Suíça - Belo Horizonte/MG - Brasil. CEP: 30421-169 - E-mail: luceliavv@gmail.com - ORCiD: https://orcid.org/0000-0003-2888-0823.

http://orcid.org/0000-0003-2888-0823

Covariates	Rain Pattern
	More	Less	More	Less	Doesn't
	Frequent	Frequent	Intense	Intense	Know
Male	39.7	45.7	55.0	43.7	46.7
Age	38.9	41.0	38.5	40.9	34.8
Std. Dev. of age in household	15.0	15.6	15.0	15.5	12.4
Incomplete high school	34.5	31.3	27.5	33.1	16.7
Incomplete college	44.8	47.0	50.3	46.8	51.7
Complete college	20.7	21.7	22.1	20.0	31.7
Near distance to river (km)	1.7	1.4	1.6	1.4	1.2
Household in flood-prone area	22.4	19.8	20.8	19.2	25.0
Any in household ever hit by flood	29.3	27.9	28.9	24.4	1.7
Sample (%)	6.8	82.3	16.9	57.0	5.3
Covariates	Temperature
Covariates	Same	Hotter	Cooler	Doesn't Know
Male	46.4	44.1	48.1	48.8
Age	43.0	40.4	42.6	36.8
Std. Dev. of age in household	14.7	15.6	16.2	12.6
Incomplete high school	33.6	30.6	33.8	13.8
Incomplete college	44.2	47.7	40.3	60.0
Complete college	22.3	21.7	26.0	26.3
Near distance to river (km)	1.4	1.4	1.7	1.3
Household in flood-prone area	24.5	15.8	31.2	33.8
Any in household ever hit by flood	29.6	25.5	23.4	7.6
Sample (%)	26.7	58.3	7.5	7.5

Covariates	Rain Pattern		Temperature
	Mismatch	No Mismatch	Mismatch	No Mismatch
	Full Memory
Male	45.9	42.5	46.2	39.4
Age	43.9	29.7	41.0	39.7
Std. Dev. of age in household	15.3	16.1	15.6	14.4
Years continuously living in GV	30.4	20.4	30.4	15.8
Incomplete high school	31.9	30.6	31.8	30.3
Incomplete college	43.8	53.4	45.8	46.2
Complete college	24.4	16.1	22.4	23.5
Near distance to river (km)	1.5	1.4	1.4	1.7
Household in flood-prone area	20.0	19.2	18.8	25.8
Any in household ever hit by flood	27.3	24.9	26.9	26.5
Sample (%)	78.6	21.4	85.3	14.7
Covariates	Long Memory
Male	46.1	42.1	46.5	37.5
Age	44.1	30.6	40.8	41.1
Std. Dev. of age in aousehold	15.4	15.7	15.5	15.2
Years continuously living in GV	31.5	18.1	30.4	16.4
Incomplete highsSchool	32.8	27.8	32	29.4
Incomplete college	43.0	54.6	45.6	47.1
Complete college	24.2	17.6	22.4	23.5
Near distance to river (km)	1.5	1.4	1.4	1.7
Household in flood-prone area	19.0	22.2	19.1	23.5
Any in household ever hit by flood	27.8	23.6	27.1	25.0
Sample (%)	76.1	23.9	84.9	15.1
Covariates	Short Memory
Male	46.4	43.9	46.5	37.5
Age	40.4	41.2	40.8	41.1
Std. Dev. of age in household	15.2	15.7	15.5	15.2
Years continuously living in GV	25.2	31.4	30.4	16.4
Incomplete high school	28.8	34.5	32.0	29.4
Incomplete college	45.3	46.4	45.6	47.1
Complete college	25.9	19.1	22.4	23.5
Near distance to river (km)	1.5	1.4	1.4	1.7
Household in flood-prone area	22	17.6	19.1	23.5
Any in household ever hit by flood	29.2	24.3	27.1	25
Sample (%)	50.7	49.3	84.9	15.1

Covariates	Mismatch (Observed x Perceived)
	Any Perceived Change		Full Memory			Long Memory			Short Memory
	Rain Pattern	Temperature	Rain Pattern	Temperature		Rain Pattern	Temperature		Rain Pattern	Temperature
Sex (1=Male)	0.054	-0.042	0.146	0.167		0.157	0.212*		0.054	0.206+
	[0.137]	[0.088]	[0.104]	[0.107]		[0.100]	[0.106]		[0.086]	[0.106]
Age (years)	0.037+	-0.005+	0.028**	0.013*		0.031**	0.007		-0.009+	0.006
	[0.022]	[0.003]	[0.007]	[0.006]		[0.006]	[0.006]		[0.005]	[0.006]
Age Square	-0.0004+
	[0.000]
Std. Dev. of age in household	0.014+	0.006	-0.038*	0.038*		-0.018	0.023		-0.028*	0.022
	[0.008]	[0.005]	[0.016]	[0.016]		[0.015]	[0.016]		[0.013]	[0.016]
Interaction (Age x Std. Dev.)			0.001*	-0.001+		0.000	0.000		0.000+	0.000
			[0.000]	[0.000]		[0.000]	[0.000]		[0.000]	[0.000]
Incomplete college (Base = Incomplete	-0.101	0.025	0.204+	0.010		0.071	-0.057		0.094	-0.035
high school)	[0.174]	[0.106]	[0.122]	[0.128]		[0.119]	[0.127]		[0.102]	[0.127]
Complete college (Base = Incomplete	-0.342+	0.041	0.422**	0.003		0.245+	-0.056		0.283*	-0.016
high school)	[0.190]	[0.123]	[0.154]	[0.150]		[0.146]	[0.148]		[0.120]	[0.148]
Near distance to the river (km)	-0.011	0.051	0.049	-0.136**		0.063	-0.136**		0.072+	-0.125*
	[0.067]	[0.042]	[0.050]	[0.052]		[0.048]	[0.051]		[0.041]	[0.051]
Household in flood-prone area	0.063	-0.247*	-0.052	-0.239+		-0.270*	-0.183		0.094	-0.143
(1=Yes)	[0.191]	[0.118]	[0.143]	[0.140]		[0.136]	[0.139]		[0.117]	[0.139]
Anyone in household ever hit by flood	-0.009	-0.043	0.010	0.130		0.157	0.166		0.114	0.144
(1=Yes)	[0.170]	[0.107]	[0.129]	[0.132]		[0.126]	[0.131]		[0.104]	[0.129]
Serious lack of green spaces in the				0.279*			0.288*			0.434**
household surroundings				[0.135]			[0.135]			[0.134]
Constant	0.798+	0.657**	-0.433			-0.651*	0.745*		0.237	0.706*
	[0.478]	[0.183]	[0.317]		[0.305]		[0.324]	[0.266]		[0.326]
Atanh-rho	0.304**		-0.092		0.347**			-0.363**
	[0.089]		[0.079]		[0.073]			[0.070]
Observations	940	940	891		891		891	891		891

Panel A: high level of risk aversion [αⁱ = 0; π^𝜄 = (0.7; 0.3)]
Expectations (π²_s₁;π²_s₂)	Tax % (τ²)	Equilibrium Price (p)	Demand % (θ₁;θ₂)	Welfare loss %
(0.3; 0.7)	9.439	5.072	(49.967; 50.033)	5.000
(0.4; 0.6)	6.896	4.660	(49.976; 50.024)	2.718
(0.5; 0.5)	2.978	4.226	(49.989; 50.011)	1.217
(0.6; 0.4)	0.516	3.769	(49.998; 50.002)	0.319
(0.7; 0.3)	0.000	3.289	(50.000; 50.000)	0.000
(0.8; 0.2)	-1.039	2.789	(50.004; 49.996)	0.418
Panel B: intermediate level of risk aversion [αⁱ = 10; π^𝜄 = (0.7; 0.3)]
Expectations (π²_s₁;π²_s₂)	Tax % (τ²)	Equilibrium Price (p)	Demand % (θ₁;θ₂)	Welfare loss %
(0.3; 0.7)	8.936	5.056	(49.970; 50.030)	4.996
(0.4; 0.6)	6.179	4.645	(49.997; 50.023)	2.713
(0.5; 0.5)	2.934	4.211	(49.990; 50.010)	1.214
(0.6; 0.4)	0.511	3.755	(49.998; 50.002)	0.318
(0.7; 0.3)	0.000	3.277	(50.000; 50.000)	0.000
(0.8; 0.2)	-1.037	2.778	(50.004; 49.996)	0.412
Panel C: low level of risk aversion [αⁱ = 50; π^𝜄 = (0.7; 0.3)]
Expectations (π²_s₁;π²_s₂)	Tax % (τ²)	Equilibrium Price (p)	Demand % (θ₁;θ₂)	Welfare loss %
(0.3; 0.7)	6.989	5.000	(49.977; 50.023)	4.957
(0.4; 0.6)	6.039	4.589	(49.980; 50.020)	2.692
(0.5; 0.5)	2.767	4.157	(49.991; 50.009)	1.206
(0.6; 0.4)	0.494	3.705	(49.998; 50.002)	0.316
(0.7; 0.3)	0.000	3.231	(50.000; 50.000)	0.000
(0.8; 0.2)	-1.031	2.738	(50.003; 49.997)	0.409

\begin{matrix} y_{P}^{*} = X_{P} β_{P} + ɛ_{P}, if y_{P}^{*} > 0, 0 otherwise y_{T}^{*} = X_{T} β_{T} + ɛ_{T}, if y_{T}^{*} > 0, \\ 0 otherwise (ɛ_{P} ɛ_{T} |X_{P}, X_{T}) \sim N [(0 0), (1 ρ ρ 1)] \end{matrix}

\begin{matrix} ({\tilde{c}}^{i} (π^{i}, p, τ^{i}), {\tilde{θ}}^{i} (π^{i}, p, τ^{i})) \\ = \{\sum_{s \in S} π_{s}^{i} u^{i} (c_{s}) : \exists θ^{i} \in R_{+} such that (c_{s}^{i}, θ^{i}) \in b^{i} (p, τ^{i}) \forall s \in S\} \end{matrix}

\begin{matrix} 1 . Σ_{i \in \{1, 2\}} {\tilde{θ}}^{i} (π^{i}, p, τ^{i}) = ϑ \\ 2 . c^{i} \in {\tilde{c}}^{i} (π^{i}, p, τ^{i}) and θ^{i} \in {\tilde{θ}}^{i} (π^{i}, p, τ^{i}) \end{matrix}

{\tilde{θ}}^{i} (π^{i}, p, τ^{i}) = \frac{(p - t_{s_{1}}) π_{s_{1}}^{i} (α^{i} + e^{i} - τ^{i} - l_{s_{2}}) + (p - t_{s_{2}}) π_{s_{2}}^{i} (α^{i} + e^{i} - τ^{i} - l_{s_{1}})}{(p - t_{s_{1}}) (p - t_{s_{2}})}

\begin{matrix} {\tilde{c}}_{s}^{i} (π^{i}, p τ^{i}) = \frac{(t_{s} - p) [(p - t_{s 1}) π_{s_{1}}^{i} (α^{i} + e^{i} - τ^{i} - l_{s_{2}}) + (p - t_{s_{2}}) π_{S_{2}}^{i} (α^{i} + e^{i} - τ^{i} - l_{s_{1}})]}{(p - t_{S_{1}}) (p - t_{s_{2}})} \\ + e^{i} - τ^{i} - l_{s} \end{matrix}

wl = \frac{v^{i} (π^{i}, p, τ^{ι}) - Σ_{s \in S} π_{s}^{i} u^{k} ({\tilde{c}}_{s}^{k} ({\tilde{θ}}^{k} (π^{k}, p, τ^{ι})))}{v^{i} (π^{i}, p, τ^{ι})}

{wl}^{G} = \frac{v^{i} (π^{ι}, p, τ^{ι}) - Σ_{s \in S} π_{s}^{ι} u^{k} ({\tilde{c}}_{s}^{k} ({\tilde{θ}}^{k} (π^{ι}, p, τ^{k})))}{v^{i} (π^{ι}, p, τ^{ι})}

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