Information and Opportunistic Behavior in Federal Crop Insurance Programs
AbstractOpportunistic behavior in crop insurance can arise due to asymmetric information between producers and the Federal Crop Insurance Corporation. Producers who insure fields using transitional yields based on county average yields or who select options such as buy-up coverage or revenue insurance may increase their return from crop insurance. Using field-level crop insurance contract data for several crops in five growing regions, we find evidence that producers can profit from using buy-up coverage, revenue insurance, and transitional yields and that the level of producer opportunism is crop but not necessarily land-quality specific and is greater due to premium subsidization.
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Bibliographic InfoPaper provided by School of Economic Sciences, Washington State University in its series Working Papers with number 2008-9.
Length: 34 pages
Date of creation: Aug 2008
Date of revision:
opportunistic behavior; crop insurance; buy-up; revenue; transitional yields;
Find related papers by JEL classification:
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2009-01-03 (Agricultural Economics)
- NEP-ALL-2009-01-03 (All new papers)
- NEP-IAS-2009-01-03 (Insurance Economics)
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