Advanced Search
MyIDEAS: Login to save this paper or follow this series

Assessing the Farm Level Impacts of Yield and Revenue Insurance: an Expected Value-Variance Approach

Contents:

Author Info

  • Berg, Ernst
Registered author(s):

    Abstract

    This paper investigates the farm level impacts of multiple peril yield and revenue insurance in an expected value-variance framework. The analysis is conducted using stochastic simulation jointly with numerical optimisation. Simulation is used to compute the means and variances of revenues as affected by the insurance schemes under consideration. In a second step these results are incorporated in a whole-farm programming approach, which optimises a portfolio that consists of crop production and insurance activities. The results of a case study indicate that from the farmer's point of view there is an incentive to buy multiple peril crop insurance, because it significantly reduces the variability of income. The risk reduction through insurance in turn leads to a specialisation of the production program. The farm level benefit of crop insurance strongly depends on the decision maker's degree of risk aversion. Furthermore, risk free parts of the total income reduce the economic attractiveness of insurance schemes. This applies e.g. to the area payments under the European agricultural policy, which therefore limit the potential demand for crop insurance.

    Download Info

    If 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.
    File URL: http://purl.umn.edu/24834
    Download Restriction: no

    Bibliographic Info

    Paper provided by European Association of Agricultural Economists in its series 2002 International Congress, August 28-31, 2002, Zaragoza, Spain with number 24834.

    as in new window
    Length:
    Date of creation: 2002
    Date of revision:
    Handle: RePEc:ags:eaae02:24834

    Contact details of provider:
    Email:
    Web page: http://www.eaae.org
    More information through EDIRC

    Related research

    Keywords: crop insurance; risk management; portfolio selection; stochastic programming; expected value-variance analysis; Risk and Uncertainty;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Steven D. Hanson & Robert J. Myers & J. Roy Black, 1998. "The Effects of Crop Yield Insurance Designs on Farmer Participation and Welfare," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 80(4), pages 806-820.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ags:eaae02:24834. See general 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: (AgEcon Search).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.