Evaluating the effects of asymmetric information in a model of crop insurance
AbstractAsymmetric information in the form of moral hazard and adverse selection can result in sizable program costs for government-provided crop insurance plans. We present a methodology and illustrative simulations to show how these two types of information problems interact in a way to create program costs for the providers of crop insurance. Our methodology allows us to ascertain the relative contributions to program costs of these two sources of asymmetric information. The exercise is useful in pointing out directions for future study seeking ways to improve the design of crop insurance plans.
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Bibliographic InfoArticle provided by Emerald Group Publishing in its journal Agricultural Finance Review.
Volume (Year): 67 (2007)
Issue (Month): 2 (September)
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Other versions of this item:
- Michael Hoy & Adeyemi Esuola & Zahirul Islam & Calum G. Turvey, 2007. "Evaluating the Effects of Asymmetric Information in a Model of Crop Insurance," Working Papers 0706, University of Guelph, Department of Economics.
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