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U.S. Farmers’ Insurance Choices under Expected Utility Theory and Cumulative Prospect Theory

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  • Bulut, Harun

Abstract

Towards explaining regional differences in U.S. farmers’ crop insurance choices, we propose a budget heuristic effect within the standard Expected Utility Theory (EUT) framework and conduct theoretical and simulation analyses. We also disentangle the effects of various aspects the cumulative prospect theory (CPT) framework in a separate simulation analysis.

Suggested Citation

  • Bulut, Harun, 2016. "U.S. Farmers’ Insurance Choices under Expected Utility Theory and Cumulative Prospect Theory," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236019, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea16:236019
    DOI: 10.22004/ag.econ.236019
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    References listed on IDEAS

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    14. Harun Bulut & Keith J. Collins, 2014. "Designing farm supplemental revenue coverage options on top of crop insurance coverage," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 74(3), pages 397-426, August.
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    Cited by:

    1. Shin, Soye, 2018. "Better understanding of Demand for Weather Index Insurance among Smallholder Farmers under Prospect Theory," 2018 Annual Meeting, August 5-7, Washington, D.C. 274477, Agricultural and Applied Economics Association.
    2. Lauriane Yehouenou & Barry J Barnett & Ardian Harri & Keith H Coble, 2018. "STAX Appeal?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 40(4), pages 563-584, December.

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