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Reliability Of Options Markets For Crop Revenue Insurance Rating

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  • Buschena, David E.
  • Ziegler, Lee

Abstract

Revenue insurance, only recently introduced for major crops in the U.S., has captured a considerable share of the multiple-peril insurance market. This study evaluates the predictive reliability of using price distributions inferred from options markets to rate revenue insurance products. We find for periods early in the crop growing season that price distributions inferred from options trades offer greater reliability than distributions based on historical futures trades. Options-based price distributions should receive further consideration in crop revenue insurance rating, but current administrative constraints must be considered.

Suggested Citation

  • Buschena, David E. & Ziegler, Lee, 1999. "Reliability Of Options Markets For Crop Revenue Insurance Rating," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(2), pages 1-26, December.
    • Handle: RePEc:ags:jlaare:30806
    DOI: 10.22004/ag.econ.30806
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    Cited by:

    1. Paulson, Nicholas David, 2004. "Insuring uncertainty in value-added agriculture: ethanol," ISU General Staff Papers 2004010108000018198, Iowa State University, Department of Economics.

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