Why Don’t Local Governments Buy Catastrophe Insurance? Biased Decision-Makers

Theoretical background: Incorporating behavioral analysis into finance allows for finding responses to many questions that researchers have not been able answer by relying on assumptions characteristic of the traditional, normative approach. One areas where recently achievements used analyze selected problems is public finance. In this article, we use psychology, incorporating them finance, which us shed new light decisions made managers in Poland. Purpose article: The aim paper present reasons why local governments do buy insurance would protect against potential losses resulting from occurrence a catastrophic event. paper, rely 303 municipalities, following premise an obvious way learn about motives, constraints, and decision-making process ask decision-makers. Research methods: This examines influence determinants level tax revenue per capita managers. CART method was purpose. necessary empirical data were obtained through CAWI survey conducted 2020 between August 1 September 21 consortium two research agencies: Biostat & Development Sp. z o.o. Main findings: demonstrates factors significantly impact managers' purchase catastrophe insurance. Our results confirm significant role decision maker's traits, judgments, views, feelings, experiences process.