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The crop insurance demand response to the Wildfire and Hurricane Indemnity Program Plus

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  • Dylan Turner
  • Francis Tsiboe

Abstract

Previous literature has suggested that ad hoc disaster aid can crowd out demand for residential flood insurance. However, this phenomenon remains relatively unexplored in the agriculture insurance sector. In this paper, we focus on the most recent ad hoc disaster aid program for US agricultural producers, the Wildfire and Hurricane Indemnity Program Plus (WHIP+). Using county‐level data on WHIP+ payments, we find support for the program crowding out demand for crop insurance. However, we find the issue to be nuanced, noting that the demand response to WHIP+ payments is subject to heterogeneity across several dimensions including commodity, insurance plan, and coverage level.

Suggested Citation

  • Dylan Turner & Francis Tsiboe, 2022. "The crop insurance demand response to the Wildfire and Hurricane Indemnity Program Plus," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(3), pages 1273-1292, September.
    • Handle: RePEc:wly:apecpp:v:44:y:2022:i:3:p:1273-1292
    DOI: 10.1002/aepp.13314
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    References listed on IDEAS

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    1. Vincent H. Smith & Joseph W. Glauber, 2012. "Agricultural Insurance in Developed Countries: Where Have We Been and Where Are We Going?," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 34(3), pages 363-390.
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    9. Vincent H. Smith & Myles Watts, 2010. "The New Standing Disaster Program: A SURE Invitation to Moral Hazard Behavior," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(1), pages 154-169.
    10. Daniel R. Petrolia & Craig E. Landry & Keith H. Coble, 2013. "Risk Preferences, Risk Perceptions, and Flood Insurance," Land Economics, University of Wisconsin Press, vol. 89(2), pages 227-245.
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    12. Vincent H. Smith & Joseph W. Glauber, 2012. "Agricultural Insurance in Developed Countries: Where Have We Been and Where Are We Going?," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 34(3), pages 363-390.
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    Cited by:

    1. Tsiboe, Francis & Turner, Dylan, 2023. "The crop insurance demand response to premium subsidies: Evidence from U.S. Agriculture," Food Policy, Elsevier, vol. 119(C).

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