Ex Ante Evaluation Of Index-Based Crop Insurance Effectiveness
AbstractThe paper evaluates the effectiveness of several index-based crop insurance schemes by comparing results from two alternative evaluation approaches. We apply the common ex post approach from the literature by specifying and evaluating insurance contracts by means of the data for the same historical period. We introduce an ex ante evaluation approach by distinguishing between two consecutive periods in the available time series: the first period is used for determining insurance parameters and optimal number of farmer’s insurance contracts; and the subsequent one is considered for the evaluation of the risk reduction due to the insurance contract defined as in the first period. Our empirical results based on the data for 40 grain producers in Kazakhstan indicate that the common ex post approach overestimates the risk reduction substantially for most index insurance schemes. Additionally, the ex post approach seems to cause the overestimation of index-based insurance effectiveness primarily due to differences in the estimates of the optimal insurance contracts’ number rather than due to differences in the insurance contract parameters’ estimates.
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 InfoPaper provided by European Association of Agricultural Economists in its series 2008 International Congress, August 26-29, 2008, Ghent, Belgium with number 43957.
Date of creation: 2008
Date of revision:
ex ante analysis; index-based crop insurance; weather-based index insurance; Kazakhstan; Risk and Uncertainty;
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Bokusheva, Raushan, 2010. "Measuring the dependence structure between yield and weather variables," MPRA Paper 22786, University Library of Munich, Germany.
- Raushan Bokusheva, 2011. "Measuring dependence in joint distributions of yield and weather variables," Agricultural Finance Review, Emerald Group Publishing, vol. 71(1), pages 120-141, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.