Some Simulation Results for a Green Insurance Mechanism
AbstractThis analysis extends previous work on green insurance by proposing a mechanism that offers a stronger adoption incentive and is applicable to heterogeneous populations and non-binary adoption decisions. Endogenous learning about the new technology is incorporated, and empirically calibrated simulation results are presented for the case of reduced-phosphorus dairy diets. Results show that the mechanism has a significant impact on behavior and may incur no net cost for the regulator when an insurance premium is charged. Conditions under which a green payment mechanism may be preferable to green insurance also are discussed.
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Bibliographic InfoArticle provided by Western Agricultural Economics Association in its journal Journal of Agricultural and Resource Economics.
Volume (Year): 30 (2005)
Issue (Month): 01 (April)
conservation technology adoption; dairy farming; endogenous learning; green insurance; phosphorus; risk preferences; voluntary programs; Environmental Economics and Policy;
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