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Revenue Crop Insurance Demand

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  • Shaik, Saleem
  • Coble, Keith H.
  • Knight, Thomas O.

Abstract

A two-stage simultaneous equation is utilized to model the choice of whether to purchase insurance and the choice of whether to purchase yield or revenue insurance using subjectively elicited survey data. Our results show an elasticity of demand for crop insurance that remains largely unchanged from earlier estimates (-0.40), but the elasticity for choices between yield and revenue insurance is found to be relatively more elastic (-0.76). Finally the link between adverse selection and the demand for insurance is examined.

Suggested Citation

  • Shaik, Saleem & Coble, Keith H. & Knight, Thomas O., 2005. "Revenue Crop Insurance Demand," 2005 Annual meeting, July 24-27, Providence, RI 19319, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea05:19319
    DOI: 10.22004/ag.econ.19319
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    References listed on IDEAS

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    1. Eeckhoudt, Louis & Gollier, Christian & Schlesinger, Harris, 1996. "Changes in Background Risk and Risk-Taking Behavior," Econometrica, Econometric Society, vol. 64(3), pages 683-689, May.
    2. Richard E. Just & Linda Calvin & John Quiggin, 1999. "Adverse Selection in Crop Insurance: Actuarial and Asymmetric Information Incentives," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 834-849.
    3. Keith H. Coble & Thomas O. Knight & Rulon D. Pope & Jeffery R. Williams, 1996. "Modeling Farm-Level Crop Insurance Demand with Panel Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 439-447.
    4. David A. Hennessy & Bruce A. Babcock & Dermot J. Hayes, 1997. "Budgetary and Producer Welfare Effects of Revenue Insurance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 1024-1034.
    5. Goodwin, Barry K., 1994. "Premium Rate Determination In The Federal Crop Insurance Program: What Do Averages Have To Say About Risk?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(2), pages 1-14, December.
    6. Ker, Alan P. & McGowan, Pat, 2000. "Weather-Based Adverse Selection And The U.S. Crop Insurance Program: The Private Insurance Company Perspective," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-25, December.
    7. Barry J. Barnett & Jerry R. Skees, 1995. "Region and Crop Specific Models of the Demand for Federal Crop Insurance," Journal of Insurance Issues, Western Risk and Insurance Association, vol. 18(2), pages 47-65.
    8. Vincent H. Smith & Alan E. Baquet, 1996. "The Demand for Multiple Peril Crop Insurance: Evidence from Montana Wheat Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 189-201.
    9. Mario J. Miranda & Joseph W. Glauber, 1997. "Systemic Risk, Reinsurance, and the Failure of Crop Insurance Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 206-215.
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    Cited by:

    1. Fahad, Shah & Wang, Jing & Hu, Guangyin & Wang, Hui & Yang, Xiaoying & Shah, Ashfaq Ahmad & Huong, Nguyen Thi Lan & Bilal, Arshad, 2018. "Empirical analysis of factors influencing farmers crop insurance decisions in Pakistan: Evidence from Khyber Pakhtunkhwa province," Land Use Policy, Elsevier, vol. 75(C), pages 459-467.
    2. Shaik, Saleem & Coble, Keith H. & Hudson, Darren & Miller, James C. & Hanson, Terrill R. & Sempier, Stephen H., 2008. "Willingness to Pay for a Potential Insurance Policy: Case Study of Trout Aquaculture," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 37(1), pages 1-10, April.
    3. Awais Jabbar & Qun Wu & Jianchao Peng & Ali Sher & Asma Imran & Kunpeng Wang, 2020. "Mitigating Catastrophic Risks and Food Security Threats: Effects of Land Ownership in Southern Punjab, Pakistan," IJERPH, MDPI, vol. 17(24), pages 1-18, December.
    4. Ginder, Matthew G. & Spaulding, Aslihan D., 2006. "Factors Affecting Crop Insurance Purchase Decisions in Northern Illinois," 2006 Annual meeting, July 23-26, Long Beach, CA 21073, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Dragos, Cristian Mihai & Dragos, Simona Laura & Mare, Codruta & Muresan, Gabriela Mihaela & Purcel, Alexandra-Anca, 2023. "Does risk assessment and specific knowledge impact crop insurance underwriting? Evidence from Romanian farmers," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 343-358.

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    Keywords

    Demand and Price Analysis;

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