Ex post Moral Hazard in Crop Insurance: Costly State Verification or Falsification?
AbstractThis article examines the extent to which actual crop insurance indemnification behaviour conforms to the theoretical predictions of two ex post moral hazard models ? costly state verification and costly state falsification ? and then explores whether the closely conforming model can indeed help deter ex post moral hazard in the United States (US) crop insurance program. The results suggest that indemnification behaviour in crop insurance is more in line with the costly state verification model. Following the theoretical predictions of the costly state verification model, however, may not be the optimal policy to deter ex post moral hazard since it is possible for insured producers to deceive loss adjusters and for loss magnitudes to not be truthfully verified.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Economic Issues in its journal Economic Issues.
Volume (Year): 8 (2003)
Issue (Month): 2 (September)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dan Wheatley).
If references are entirely missing, you can add them using this form.