IDEAS home Printed from https://ideas.repec.org/p/ags/iaae18/277516.html
   My bibliography  Save this paper

Willingness to pay for Weather Based Crop Insurance in Punjab

Author

Listed:
  • K.S. , A.
  • Khan, T.
  • Kishore, A.

Abstract

Crop insurance is one of the important risk management strategies adopted by farmers. However, one of the biggest challenge Government faces while promoting insurance is in setting optimum premium for crop insurance which can achieve higher participation of farmers in Insurance programme. With premium rate set at 1.5% of sum insured for wheat crop, are the farmers are willing to pay the premium at this rate to insure their wheat crop? It would be interesting to investigate this question in state like Punjab which has not implemented crop insurance. We conducted a Contingent Valuation Study to elicit Willingness to Pay (WTP) for crop insurance of wheat farmers in Punjab state. The sample consisted of 617 wheat farmers spread across 60 villages of 12 districts in Punjab. We found that it is farmers who has suffered crop loss in the past found to have higher WTP. Asset worthy farmers, banking literacy, extension contact was also found to have positive impact on WTP. The study indicated that WTP for crop insurance is around Rs 297 / acre, which is less than the existing rate of premium which is approximately Rs. 400 /acre (premium rate of 1.5%). Acknowledgement :

Suggested Citation

  • K.S. , A. & Khan, T. & Kishore, A., 2018. "Willingness to pay for Weather Based Crop Insurance in Punjab," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277516, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae18:277516
    DOI: 10.22004/ag.econ.277516
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/277516/files/1399.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.277516?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Petri Liesivaara & Sami Myyrä, 2014. "Willingness to pay for agricultural crop insurance in the northern EU," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 74(4), pages 539-554, October.
    2. Olivier Mahul & Niraj Verma, 2010. "Making Insurance Markets Work for Farmers in India," World Bank Publications - Reports 10469, The World Bank Group.
    3. Simon Chege Kimenju & Hugo De Groote, 2008. "Consumer willingness to pay for genetically modified food in Kenya," Agricultural Economics, International Association of Agricultural Economists, vol. 38(1), pages 35-46, January.
    4. Lopez-Feldman, Alejandro, 2012. "Introduction to contingent valuation using Stata," MPRA Paper 41018, University Library of Munich, Germany.
    5. Zhifeng Gao & Lisa O. House & Xiaohua Yu, 2010. "Using choice experiments to estimate consumer valuation: the role of experimental design and attribute information loads," Agricultural Economics, International Association of Agricultural Economists, vol. 41(6), pages 555-565, November.
    6. Ekin Birol & Phoebe Koundouri & Yiannis Kountouris, 2008. "Using the Choice Experiment Method to Inform River Management in Poland: Flood Risk Reduction vs. Habitat Conservation in the Upper Silesia Region," DEOS Working Papers 0802, Athens University of Economics and Business.
    7. Dugald Tinch & Sergio Colombo & Nick Hanley, 2015. "The Impacts of Elicitation Context on Stated Preferences for Agricultural Landscapes," Journal of Agricultural Economics, Wiley Blackwell, vol. 66(1), pages 87-107, February.
    8. Keith H. Coble & Barry J. Barnett, 2013. "Why Do We Subsidize Crop Insurance?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(2), pages 498-504.
    9. Shahi Kiran, A.S. & Umesh, Kotrakerebasegowda, 2012. "Crop Insurance- Strategy to minimize risk in Agriculture," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126734, International Association of Agricultural Economists.
    10. Ekin Birol & Phoebe Koundouri, 2008. "Choice Experiments Informing Environmental Policy:A European Perspective," DEOS Working Papers 0801, Athens University of Economics and Business.
    11. Nick Hanley & Susana Mourato & Robert E. Wright, 2001. "Choice Modelling Approaches: A Superior Alternative for Environmental Valuatioin?," Journal of Economic Surveys, Wiley Blackwell, vol. 15(3), pages 435-462, July.
    12. Richard Carson & Nicholas Flores & Norman Meade, 2001. "Contingent Valuation: Controversies and Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(2), pages 173-210, June.
    13. repec:bla:jecsur:v:15:y:2001:i:3:p:435-62 is not listed on IDEAS
    14. Christian Gollier, 2003. "To Insure or Not to Insure?: An Insurance Puzzle," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 28(1), pages 5-24, June.
    15. Babcock, Bruce, 2015. "Using Prospect Theory to Explain Anomalous Crop Insurance Coverage Choice," 2015 Allied Social Sciences Association (ASSA) Annual Meeting, January 3-5, 2015, Boston, Massachusetts 189682, Agricultural and Applied Economics Association.
    16. Milton Boyd & Jeffrey Pai & Qiao Zhang & H. Holly Wang & Ke Wang, 2011. "Factors affecting crop insurance purchases in China: the Inner Mongolia region," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 3(4), pages 441-450, November.
    17. Gao, Zhifeng & Yu, Xiaohua & House, Lisa, 2009. "Using Choice Experiment to Estimate Consumer Valuation: the Role of Experiment Design and Attribute Information Loads," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49406, Agricultural and Applied Economics Association.
    18. Liu, Yanyan & Chen, Kevin Z. & Hill, Ruth Vargas & Xiao, Chengwei, 2013. "Borrowing from the insurer: An empirical analysis of demand and impact of insurance in China:," IFPRI discussion papers 1306, International Food Policy Research Institute (IFPRI).
    19. Bruce A. Babcock, 2015. "Using Cumulative Prospect Theory to Explain Anomalous Crop Insurance Coverage Choice," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(5), pages 1371-1384.
    20. Michael Hanemann & John Loomis & Barbara Kanninen, 1991. "Statistical Efficiency of Double-Bounded Dichotomous Choice Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(4), pages 1255-1263.
    21. Carter, Michael R. & Galarza, Francisco B. & Boucher, Steve, 2007. "Underwriting Area-based Yield Insurance to Crowd- in Credit Supply Demand," Working Papers 190918, University of California, Davis, Department of Agricultural and Resource Economics.
    22. Kiran, Shashi & Umesh, K.B., 2015. "Willingness to Pay for Crop Insurance Premium-A Study on Maize Farmers in India," 2015 Conference, August 9-14, 2015, Milan, Italy 210867, International Association of Agricultural Economists.
    23. Ali, Akhter, 2013. "Farmers’ Willingness to Pay for Index Based Crop Insurance in Pakistan: A Case Study on Food and Cash Crops of Rain-fed Areas," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 26(2).
    24. Carter, Michael R. & Galarza, Francisco & Boucher, Stephen, 2007. "Underwriting area-based yield insurance to crowd-in credit supply and demand," MPRA Paper 24326, University Library of Munich, Germany.
    25. Ekin Birol & Phoebe Koundouri (ed.), 2008. "Choice Experiments Informing Environmental Policy," Books, Edward Elgar Publishing, number 4102.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Islam, Md Din II & Rahman, Airin & Sarker, M. Sazzadur Rahman & Luo, Jianchao & Liang, Hu, 2021. "Factors affecting farmers' willingness to adopt crop insurance to manage disaster risk: evidence from Bangladesh," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 24(3), April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aditya, K.S. & Kishore, Avinash & Khan, Tajuddin, 2020. "Exploring farmers’ willingness to pay for crop insurance products: A case of weather-based crop insurance in Punjab India," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 33(2), December.
    2. Subash, S.P. & Aditya, K.S. & Srinivas, K., 2018. "Willingness to Pay for Participation in Community-Based Programme: A Case of Seed Self-Help Group in Uttar Pradesh," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 73(03), July.
    3. Gebreegziabher, Z. & Mekonnen, A. & Beyene, A.D. & Hagos, F., 2018. "Valuation of access to irrigation water in rural Ethiopia: application of choice experiment and contingent valuation methods," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277168, International Association of Agricultural Economists.
    4. Mahieu, Pierre-Alexandre & Andersson, Henrik & Beaumais, Olivier & Crastes dit Sourd, Romain & Hess, François-Charles & Wolff, François-Charles, 2017. "Stated preferences: a unique database composed of 1657 recent published articles in journals related to agriculture, environment, or health," Review of Agricultural, Food and Environmental Studies, Institut National de la Recherche Agronomique (INRA), vol. 98(3), November.
    5. Richard T. Carson & Miko_aj Czajkowski, 2014. "The discrete choice experiment approach to environmental contingent valuation," Chapters, in: Stephane Hess & Andrew Daly (ed.), Handbook of Choice Modelling, chapter 9, pages 202-235, Edward Elgar Publishing.
    6. Gómez-Limón, José A. & Granado-Díaz, Rubén, 2023. "Assessing the demand for hydrological drought insurance in irrigated agriculture," Agricultural Water Management, Elsevier, vol. 276(C).
    7. Chun-Hung Lee & Chiung-Hsin Wang, 2017. "Estimating Residents’ Preferences of the Land Use Program Surrounding Forest Park, Taiwan," Sustainability, MDPI, vol. 9(4), pages 1-19, April.
    8. Mirzobobo Yormirzoev & Ramona Teuber & Daniil Baranov, 2018. "Is Tajikistan a Potential Market for Genetically Modified Potatoes?," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(1), pages 216-226.
    9. Uwamariya, Beatrice, 2014. "Assessment of Consumer Awareness and Preferences for Quality Certification and Origin-Labeling in Fruit Salads in Kigali,Rwanda," Research Theses 198512, Collaborative Masters Program in Agricultural and Applied Economics.
    10. Engelman, Marc & Lagerkvist, Carl-Johan & Gren, Ing-Marie, 2018. "Hunters' trade-off in valuation of different game animals in Sweden," Forest Policy and Economics, Elsevier, vol. 92(C), pages 73-81.
    11. Halkos, George & Galani, Georgia, 2016. "Assessing willingness to pay for marine and coastal ecosystems: A Case Study in Greece," MPRA Paper 68767, University Library of Munich, Germany.
    12. Alemu Mekonnen & Zenebe Gebreegziabher & Abebe D. Beyene & Fitsum Hagos, 2019. "Valuation of Access to Irrigation Water in Rural Ethiopia: Application of Choice Experiment and Contingent Valuation Methods," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 6(01), pages 1-26, September.
    13. Oerlemans, Leon A.G. & Chan, Kai-Ying & Volschenk, Jako, 2016. "Willingness to pay for green electricity: A review of the contingent valuation literature and its sources of error," Renewable and Sustainable Energy Reviews, Elsevier, vol. 66(C), pages 875-885.
    14. H. Holly Wang & Lu Liu & David L. Ortega & Yu Jiang & Qiujie Zheng, 2020. "Are smallholder farmers willing to pay for different types of crop insurance? An application of labelled choice experiments to Chinese corn growers," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 45(1), pages 86-110, January.
    15. Marie-Pier Schinck & Chloé L’Ecuyer-Sauvageau & Justin Leroux & Charlène Kermagoret & Jérôme Dupras, 2020. "Risk, Drinking Water and Harmful Algal Blooms: A Contingent Valuation of Water Bans," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 34(12), pages 3933-3947, September.
    16. Robert J. Johnston & Eric T. Schultz & Kathleen Segerson & Elena Y. Besedin & Mahesh Ramachandran, 2012. "Enhancing the Content Validity of Stated Preference Valuation: The Structure and Function of Ecological Indicators," Land Economics, University of Wisconsin Press, vol. 88(1), pages 102-120.
    17. Mbonane, Nobuhle Duduzile, 2018. "An analysis of farmers’ preferences for crop insurance: a case of maize farmers in Swaziland," Research Theses 334771, Collaborative Masters Program in Agricultural and Applied Economics.
    18. Yu, Jisang & Smith, Aaron & Sumner, Daniel A., 2016. "The Effects of the Premium Subsidies in the U.S. Federal Crop Insurance Program on Crop Acreage," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236022, Agricultural and Applied Economics Association.
    19. Bucheli, Janic & Dalhaus, Tobias & Finger, Robert, 2022. "Temperature effects on crop yields in heat index insurance," Food Policy, Elsevier, vol. 107(C).
    20. Franz Hackl & Gerald J. Pruckner, 2005. "Warm glow, free‐riding and vehicle neutrality in a health‐related contingent valuation study," Health Economics, John Wiley & Sons, Ltd., vol. 14(3), pages 293-306, March.

    More about this item

    Keywords

    Risk and Uncertainty;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iaae18:277516. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.