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Does The Samaritan'S Dilemma Matter? Evidence From U.S. Agriculture

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  • Tatyana Deryugina
  • Barrett Kirwan

Abstract

The Samaritan's dilemma posits a downside to charity: recipients may rely on free aid instead of their own efforts. Anecdotally, the expectation of free assistance is thought to be important for decisions about insurance and risky behavior in numerous settings, but reliable empirical evidence is scarce. We estimate whether the Samaritan's dilemma exists in U.S. agriculture, where both private crop insurance and frequent federal disaster assistance are present. We find that bailout expectations are qualitatively and quantitatively important for the insurance decision. Furthermore, aid expectations reduce both expenditure on farm inputs and subsequent crop revenue. (JEL D72, H84, Q18)

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  • Tatyana Deryugina & Barrett Kirwan, 2018. "Does The Samaritan'S Dilemma Matter? Evidence From U.S. Agriculture," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 983-1006, April.
    • Handle: RePEc:bla:ecinqu:v:56:y:2018:i:2:p:983-1006
    DOI: 10.1111/ecin.12527
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    3. Tatyana Deryugina & Benjamin M. Marx, 2021. "Is the Supply of Charitable Donations Fixed? Evidence from Deadly Tornadoes," American Economic Review: Insights, American Economic Association, vol. 3(3), pages 383-398, September.
    4. Meri Davlasheridze & Qing Miao, 2021. "Natural disasters, public housing, and the role of disaster aid," Journal of Regional Science, Wiley Blackwell, vol. 61(5), pages 1113-1135, November.
    5. Hsing-Hsiang Huang & Michael R. Moore, 2018. "Farming under Weather Risk: Adaptation, Moral Hazard, and Selection on Moral Hazard," NBER Chapters, in: Agricultural Productivity and Producer Behavior, pages 77-124, National Bureau of Economic Research, Inc.
    6. Berlemann, Michael & Steinhardt, Max F. & Tutt, Jascha, 2015. "Do Natural Disasters Stimulate Individual Saving? Evidence from a Natural Experiment in a Highly Developed Country," IZA Discussion Papers 9026, Institute of Labor Economics (IZA).
    7. Stephan J. Goetz & Meri Davlasheridze & Yicheol Han & David A. Fleming-Muñoz, 2019. "Explaining the 2016 Vote for President Trump across U.S. Counties," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(4), pages 703-722, December.
    8. Stephan Schneider & Sven Kunze, 2021. "Disastrous Discretion: Ambiguous Decision Situations Foster Political Favoritism," KOF Working papers 21-491, KOF Swiss Economic Institute, ETH Zurich.
    9. Peter John Robinson & W. J. Wouter Botzen & Fujin Zhou, 2021. "An experimental study of charity hazard: The effect of risky and ambiguous government compensation on flood insurance demand," Journal of Risk and Uncertainty, Springer, vol. 63(3), pages 275-318, December.
    10. Naranjo, María A. & Pieters, Janneke & Alpízar, Francisco, 2019. "Credit, insurance and farmers’ liability: Evidence from a lab in the field experiment with coffee farmers in Costa Rica," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 12-27.
    11. Joseph P. Janzen & Trey Malone & K. Aleks Schaefer & Daniel P. Scheitrum, 2023. "Political returns to ad hoc farm payments?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(1), pages 555-578, March.
    12. Ferreira, Susana, 2024. "Extreme Weather Events and Climate Change: Economic Impacts and Adaptation Policies," IZA Discussion Papers 16715, Institute of Labor Economics (IZA).

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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H84 - Public Economics - - Miscellaneous Issues - - - Disaster Aid
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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