Howard Kunreuther

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Howard Kunreuther
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Born (1938-11-14) November 14, 1938 (age 84)
  • B.A. in Economics
  • Ph.D. in Economics
Alma mater
  • Massachusetts Institute of Technology
  • Bates College
OrganizationWharton Risk Management and Decision Processes Center

Howard Kunreuther (born 1938) is the James G. Dinan Professor Emeritus of Decision Sciences and Public Policy at the Wharton School, University of Pennsylvania and founder of the Wharton Risk Management and Decision Processes Center. He received his A.B. in Economics from Bates College, and his Ph.D. in Economics from the Massachusetts Institute of Technology. He is a fellow of the American Association for the Advancement of Science, and a distinguished fellow of the Society for Risk Analysis.

Kunreuther's research focuses on managing and financing losses due to technological and natural hazards[1] such as high level radioactive waste repositories,[2] and extreme events such as climate change,[3] terrorism,[4] earthquakes,[5] floods,[6] and hurricanes.[7] He has been involved with proposed reforms to the National Flood Insurance Program (NFIP)[8] in his role as a member of FEMA’s Technical Mapping Advisory Council,[9] the National Academies of Science and National Research Council,[10] and Congressional hearings on public policy for risk management and preparedness.[11]

Kunreuther's key contributions are to the fields of interdependent security,[12] public-private partnerships against catastrophic losses,[13] decision making under uncertainty,[14] and behavioral economics. [15] With respect to extreme events, individuals use simplified rules and heuristics and often make suboptimal decisions that satisfy different goals and objectives.[16] [17] Contrasting normative models of choice (i.e., how decisions should be made) and descriptive models of behavior (i.e., how individuals actually make decisions), prescriptive solutions are those that lead individuals and managers to make better decisions with regard to risk preparedness.[18]

Key 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[19] in a system can cause large losses to others. An example is the bombing of Pan Am Flight 103 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.[20]

Guiding Principles for Insurance

  • Insurance premiums should be based on risk[21] in order to provide signals to individuals as to the hazards they face and to encourage them to engage in cost-effective mitigation measures[22] 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 voucher to cover the costs of protecting their property.[23]

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.[24]


  • Kunreuther, H., Meyer, R. J., & Michel-Kerjan, E. O. (Eds.). (2019). The Future of Risk Management. University of Pennsylvania Press. ISBN 9780812251326.

In the media



  1. Kunreuther, H. (1984). Causes of underinsurance against natural disasters. Geneva Papers on Risk and Insurance, 206-220.
  2. Easterling, D., & Kunreuther, H. (1995). The Dilemma of Siting a High-Level Nuclear Waste Repository. Kluwer Academic Publishers.
  3. Kunreuther, H., Michel-Kerjan, E., & Ranger, N. (2013). Insuring future climate catastrophes. Climatic Change, 118(2), 339-354; Kunreuther, H., & Weber, E. U. (2014). Aiding decision making to reduce the impacts of climate change. Journal of Consumer Policy, 37(3), 397-411; and served as a Coordinating Lead Author for the Intergovernmental Panel on Climate Change (IPCC)’s 5th Assessment Report, Working Group III, Chapter 2, “Integrated Risk and Uncertainty Assessment of Climate Change Response Policies.” Kunreuther, H., S. Gupta, V. Bosetti, R. Cooke, V. Dutt, M. Ha-Duong, H. Held, et al.Integrated risk and uncertainty assessment of climate change response policies. In Climate Change 2014: Mitigation of Climate Change: Working Group III Contribution to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, pp. 151-206.
  4. Kunreuther, H. (2019). Testimony before the U.S. Senate, June 18, The Reauthorization of the Terrorism Risk Insurance Program; Michel‐Kerjan, E., & Kunreuther, H. (2018). A Successful (Yet Somewhat Untested) Case of Disaster Financing: Terrorism Insurance under TRIA, 2002-2020. Risk Management and Insurance Review, 21(1), 157-180.
  5. Kunreuther, H. (1999). Insurance as an integrating policy tool for disaster management: The role of public-private partnerships. Earthquake Spectra, 15(4), 725-745.
  6. Michel-Kerjan, E., & Kunreuther, H. (2011). Redesigning flood insurance. Science, 333(6041), 408-409; Kunreuther, H. (2018). Improving the National Flood Insurance Program. Behavioural Public Policy, 1-15.
  7. Kunreuther, H., & Pauly, M. (2006). Rules rather than discretion: Lessons from Hurricane Katrina. Journal of Risk and Uncertainty, 33(1-2), 101-116.
  8. Michel-Kerjan, E., & Kunreuther, H. (2011). Redesigning Flood Insurance Science, 333(6041), 408-409. and Kousky, C., & Kunreuther, H. (2014). Addressing Affordability in the National Flood Insurance Program Journal of Extreme Events, 1(01), 1450001.
  9. Technical Mapping Advisory Council, TMAC 2015 Future Conditions Risk Assessment and Modeling Report
  10. The National Academies Press, Affordability of National Flood Insurance Program Premiums: Report 1, and Report 2,
  11. Examining the Role of Government Assistance for Disaster Victims: A Review of H.R. 3042 Feb. 16, 2012; The Reauthorization of the Terrorism Risk Insurance Program June 18, 2019.
  12. Kunreuther, H. & Heal, G. (2003). Interdependent Security. Journal of Risk and Uncertainty, 26:231-49.
  13. Dacy, D. C., & Kunreuther, H. (1969). The Economics of Natural Disasters: Implications for Federal Policy. New York: The Free Press, MacMillan. Winner of the 1971 Elizur Wright Award for the publication that made “the most significant contribution to the literature of insurance”; Kunreuther, H., Ginsberg, R., Miller, L., Sagi, P., Slovic, P., Borkan, B., & Katz, N. (1978) Disaster Insurance Protection: Public Policy Lessons. New York: Wiley; He is a recipient of the 2015 Shin Research Excellence Award from the Geneva Association and the International Insurance Society (IIS) "in recognition of outstanding work on the role of public-private partnerships in mitigating and managing risks." Kunreuther, H. (2015). The Role of Insurance in Reducing Losses from Extreme Events: The Need for Public–Private Partnerships. The Geneva Papers on Risk and Insurance - Issues and Practice, 40(4), 741-762.
  14. Kunreuther, H., Hoch S.J., & Gunther, R. (2001). Wharton on Making Decisions. New York: John Wiley & Sons, Inc.
  15. Kunreuther, H., & Pauly, M. (2018). Behavioral Economics of Multiperiod Insurance Purchasing Behavior: The Role of Emotions. Foundations and Trends® in Microeconomics, 12(2), 109-199.
  16. Kunreuther, H. (1969). Extensions of Bowman’s Theory on Managerial Decision-making, Management Science, 15(8), B-415; Kunreuther, H., & Bowman, E. H. (1997). A Dynamic Model of Organizational Decision Making: Chemco Revisited Six Years After Bhopal, Organization Science, 8(4), 404-413; Bowman, E., & Kunreuther, H. (1988), Post‐Bhopal Behaviour at a Chemical Company. Journal of Management Studies, 25(4), 387-400.
  17. Krantz, D. H., & Kunreuther, H. (2007). Goals and plans in decision making. Judgment and Decision Making, 2(3), 137.
  18. Kunreuther, H., Meyer, R., & Michel-Kerjan, E. (2013). Overcoming decision biases to reduce losses from natural catastrophes. Pages 398-413 In: Behavioral Foundations of Policy, E. Shafir (ed.) Princeton University Press (2013).
  19. Kunreuther, H. (2009). The Weakest Link: Risk Management Strategies for Dealing with Interdependencies. In: The Network Challenge: New Competencies and Strategies for an Interlinked World. Paul R. Kleindorfer and Yoram Wind (eds.), Upper Saddle River, NJ: Wharton School Publishing.
  20. Heal, G., & Kunreuther, H. (2005). IDS Models of Airline Security. Journal of Conflict Resolution, 49(2), 201-217.
  21. Kunreuther, H., Dorman, J., Edelman, S., Jones, C., Montgomery, M., & Sperger, J. (2017). Structure Specific Flood Risk Based Insurance. Journal of Extreme Events, 4(03), 1750011.
  22. Kunreuther, H. (2008). Reducing Losses from Catastrophic Risks through Long-Term Insurance and Mitigation. Social Research: An International Quarterly, 75(3), 905-930.
  23. Kousky, C., & Kunreuther, H. (2014). Addressing affordability in the national flood insurance program. Journal of Extreme Events, 1(01), 1450001; Zhao, W., Kunreuther, H., & Czajkowski, J. (2015). Affordability of the National Flood Insurance Program: Application to Charleston County, South Carolina. Natural Hazards Review, 17(1), 04015020.
  24. Meyer, R., & Kunreuther, H. (2017). The Ostrich Paradox: Why We Underprepare for Disasters, Wharton School Press, 2017.

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