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On Choosing A Base Coverage Level For Multiple Peril Crop Insurance Contracts

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  • Ker, Alan P.
  • Coble, Keith H.

Abstract

For multiple peril crop insurance, the U.S. Department of Agriculture's Risk Management Agency estimates the premium rate for a base coverage level and then uses multiplicative adjustment factors to recover rates at other coverage levels. Given this methodology, accurate estimation of the base coverage level from 65% to 50%. The purpose of this analysis was to provide some insight into whether such a change should or should not be carried out. Not surprisingly, our findings indicate that the higher coverage level should be maintained as the base.

Suggested Citation

  • Ker, Alan P. & Coble, Keith H., 1998. "On Choosing A Base Coverage Level For Multiple Peril Crop Insurance Contracts," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(2), pages 1-18, December.
    • Handle: RePEc:ags:jlaare:31189
    DOI: 10.22004/ag.econ.31189
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    References listed on IDEAS

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    Cited by:

    1. 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.

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