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The Effects of Transitional Yields on Adverse Selection in Crop Insurance

Author

Listed:
  • Walters, Cory G.
  • Shumway, C. Richard
  • Chouinard, Hayley H.
  • Wandschneider, Philip R.

Abstract

Transitional yields based on county average can be used by producers as the basis to obtain crop insurance on fields that have not previously produced the crop. Using field-level crop insurance contract data for several crops in five different growing regions we examine the impact of this asymmetric information on adverse selection. Our results indicate that adverse selection does exist from the use of transitional yields and that it is crop specific but not land-quality specific.

Suggested Citation

  • Walters, Cory G. & Shumway, C. Richard & Chouinard, Hayley H. & Wandschneider, Philip R., 2007. "The Effects of Transitional Yields on Adverse Selection in Crop Insurance," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9849, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea07:9849
    DOI: 10.22004/ag.econ.9849
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    Cited by:

    1. Deryugina, Tatyana, 2012. "Does Selection in Insurance Markets Always Favor Buyers?," MPRA Paper 53583, University Library of Munich, Germany.

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    Keywords

    Risk and Uncertainty;

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