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Some Simulation Results for a Green Insurance Mechanism

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  • Baerenklau, Kenneth A.

Abstract

This analysis extends previous work on green insurance by proposing a mechanism that offers a stronger adoption incentive and is applicable to heterogeneous populations and non-binary adoption decisions. Endogenous learning about the new technology is incorporated, and empirically calibrated simulation results are presented for the case of reduced-phosphorus dairy diets. Results show that the mechanism has a significant impact on behavior and may incur no net cost for the regulator when an insurance premium is charged. Conditions under which a green payment mechanism may be preferable to green insurance also are discussed.

Suggested Citation

  • Baerenklau, Kenneth A., 2005. "Some Simulation Results for a Green Insurance Mechanism," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 30(1), pages 1-15, April.
    • Handle: RePEc:ags:jlaare:30787
    DOI: 10.22004/ag.econ.30787
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    References listed on IDEAS

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    1. Olivier Mahul, 1999. "Optimum area yield crop insurance," Post-Print hal-01952090, HAL.
    2. Kenneth A. Baerenklau, 2005. "Toward an Understanding of Technology Adoption: Risk, Learning, and Neighborhood Effects," Land Economics, University of Wisconsin Press, vol. 81(1).
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    7. Olivier Mahul, 1999. "Optimum Area Yield Crop Insurance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 75-82.
    8. Golan, Amos & Judge, George & Karp, Larry, 1996. "A maximum entropy approach to estimation and inference in dynamic models or Counting fish in the sea using maximum entropy," Journal of Economic Dynamics and Control, Elsevier, vol. 20(4), pages 559-582, April.
    9. Golan, Amos & Judge, George G. & Miller, Douglas, 1996. "Maximum Entropy Econometrics," Staff General Research Papers Archive 1488, Iowa State University, Department of Economics.
    10. Saha, Atanu, 1997. "Risk Preference Estimation in the Nonlinear Mean Standard Deviation Approach," Economic Inquiry, Western Economic Association International, vol. 35(4), pages 770-782, October.
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    Cited by:

    1. Shi-jie Jiang & Lilin Wang & Feiyun Xiang, 2023. "The Effect of Agriculture Insurance on Agricultural Carbon Emissions in China: The Mediation Role of Low-Carbon Technology Innovation," Sustainability, MDPI, vol. 15(5), pages 1-20, March.
    2. Meilin Ma & Carson Reeling & Megan N Hughes & Shalamar Armstrong & Richard Roth, 2023. "Comparison of conservation instruments under long-run yield uncertainty and farmer risk aversion," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(5), pages 1685-1714.
    3. Yann Raineau & Marianne Lefebvre & Chantal Le Mouël & Jesus Barreiro Hurle & Thomas M Chappell & Marius Wolf & Marco de Toffol & Dimitri Dubois & Sylvain Coutu & Niklas Möhring & Marco Rogna & Emilio , 2024. "Report on Proceedings of the Workshop on Alternative Business Models for Pesticide Reduction," Post-Print hal-04628080, HAL.
    4. Wu, Qianni & Chiu, Chun-Hung, 2023. "The impacts of carbon insurance on supply chain and environment considering technology risk under cap-and-trade mechanism," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 180(C).

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