Universität zu Köln

Becker, Ann-Kristin ORCID: 0009-0007-1413-1203, Leppert, Gerald ORCID: 0009-0008-8604-2127 and Köngeter, Alexandra (2025). Vulnerable entrepreneurs’ preferences for climate risk management: A discrete choice experiment with micro-enterprises in the Philippines. Journal of Environmental Management, 392. pp. 1-20. Elsevier. ISSN 0301-4797

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Abstract

[Artikel-Nr.: 126485] Small enterprises are important contributors to economic development and local employment in low- and middle-income countries. However, they are often highly vulnerable to climate risks and have limited capacity to adapt to them. This study assesses the preferences of micro-enterprises in the Philippines for risk management strategies in response to climate risks and environmental hazards. We conducted a discrete choice experiment with 625 randomly selected entrepreneurs and estimated their preferences for three strategies: improved in- formation sharing and early warning; resilient and protective infrastructure; and climate risk insurance. Using a random parameter logit model, we estimate willingness to pay and compensating variation for all combinations of strategies and enterprise profiles. We find that entrepreneurs consider all strategies highly relevant, with climate risk insurance being the most preferred. Entrepreneurs show a higher willingness to pay for combined strategies, indicating a willingness to allocate at least 7.2% of their net income to an integrated set of climate adaptation strategies. Female entrepreneurs are less willing to pay for any strategy, and rural enterprises are less willing to pay for climate risk insurance. This may be explained by lower financial literacy in both cases. Furthermore, we show that participation in climate risk information events is associated with higher preferences for all strategies. We conclude that small enterprises show a significant but heterogeneous willingness to invest in climate risk management. Raising awareness and providing information about climate risks is likely to increase entrepreneurs’ willingness to manage climate risks. Furthermore, expanding the availability of climate risk in- surance is crucial to meet the high demand among enterprises. The results of this study can guide policymakers to allocate funds for climate risk management more efficiently and promote needs-based climate adaptation policies to support vulnerable populations.

Item Type:	Article
Creators:	Creators Email ORCID ORCID Put Code Becker, Ann-Kristin UNSPECIFIED https://orcid.org/0009-0007-1413-1203 UNSPECIFIED Leppert, Gerald UNSPECIFIED https://orcid.org/0009-0008-8604-2127 UNSPECIFIED Köngeter, Alexandra UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-806232
Identification Number:	10.1016/j.jenvman.2025.126485
Journal or Publication Title:	Journal of Environmental Management
Volume:	392
Page Range:	pp. 1-20
Number of Pages:	20
Date:	September 2025
Publisher:	Elsevier
ISSN:	0301-4797
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Faculty of Management, Economics and Social Sciences > Economics > Microeconomics, Institutions and markets > Institut für Wirtschaftspolitik
Subjects:	Political science Economics
Uncontrolled Keywords:	Keywords Language Climate change adaptation ; Climate risk management ; Climate risk insurance ; Discrete choice experiment ; Random parameter logit model ; Willingness to pay English
['eprint_fieldname_oa_funders' not defined]:	Publikationsfonds UzK
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/80623