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Risk modeling concepts relating to the design and rating of agricultural insurance contracts

Author

Listed:
  • Goodwin, Barry K.
  • Mahul, Olivier

Abstract

The authors identify the key issues and concerns that arise in the design and rating of crop yield insurance plans, with a particular emphasis on production risk modeling. The authors show how the availability of data shapes the insurance scheme and the ratemaking procedures. Relying on the U.S. experience and recent developments in statistics and econometrics, they review risk modeling concepts and provide technical guidelines in the development of crop insurance plans. Finally, they show how these risk modeling techniques can be extended to price risk in order to develop crop revenue insurance schemes.

Suggested Citation

  • Goodwin, Barry K. & Mahul, Olivier, 2004. "Risk modeling concepts relating to the design and rating of agricultural insurance contracts," Policy Research Working Paper Series 3392, The World Bank.
    • Handle: RePEc:wbk:wbrwps:3392
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    References listed on IDEAS

    as
    1. Olivier Mahul & Brian Davern Wright, 2003. "Designing optimal crop revenue insurance," Post-Print hal-01954721, HAL.
    2. Alan P. Ker & Barry K. Goodwin, 2000. "Nonparametric Estimation of Crop Insurance Rates Revisited," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 463-478.
    3. Alan P. Ker & Keith Coble, 2003. "Modeling Conditional Yield Densities," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 291-304.
    4. Barry K. Goodwin & Alan P. Ker, 1998. "Nonparametric Estimation of Crop Yield Distributions: Implications for Rating Group-Risk Crop Insurance Contracts," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 139-153.
    5. Olivier Mahul, 2003. "Hedging price risk in the presence of crop yield and revenue insurance," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 30(2), pages 217-239, June.
    6. Olivier Mahul, 2002. "Hedging in Futures and Options Markets with Basis Risk," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 22(1), pages 59-72, January.
    7. Bruce A. Babcock & Chad E. Hart & Dermot J. Hayes, 2002. "Crop Insurance Rates and the Laws of Probability," Center for Agricultural and Rural Development (CARD) Publications 02-wp298, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    8. Olivier Mahul & Brian D. Wright, 2003. "Designing Optimal Crop Revenue Insurance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 580-589.
    9. Edward Frees & Emiliano Valdez, 1998. "Understanding Relationships Using Copulas," North American Actuarial Journal, Taylor & Francis Journals, vol. 2(1), pages 1-25.
    10. Olivier Mahul, 2003. "Hedging price risk in the presence of crop yeld and revenue insurance," Post-Print hal-02680491, HAL.
    Full references (including those not matched with items on IDEAS)

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