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Mallee Wheat Farmers' Demand For Crop And Rainfall Insurance

Listed author(s):
  • Patrlck, George F.
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    Producers' demand for a crop insurance program with indemnities based on their actual yields and a rainfall insurance program with indemnities based on area rainfall is analysed. Actuarial costs of these hypothetical programs are estimated. Tobit procedures are used to analyse factors influencing the amount which farmers would be willing to pay for the alternative insurance programs. Factors related to the absolute size of risk and capacity to bear risk, as well as personal characteristics and risk attitudes of producers, have effects on the demand for insurance as hypothesised. Problems of adverse selection are associated with the area yield-based program, while both crop and rainfall insurance programs may involve some moral hazard. Producer participation in either program would be limited.

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    Article provided by Australian Agricultural and Resource Economics Society in its journal Australian Journal of Agricultural Economics.

    Volume (Year): 32 (1988)
    Issue (Month): 01 (April)

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    Handle: RePEc:ags:ajaeau:22917
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    1. Bardsley, Peter & Abey, Arun & Davenport, Scott V., 1984. "The Economics Of Insuring Crops Against Drought," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 28(01), April.
    2. Freebairn, John W., 1983. "Drought Assistance Policy," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 27(03), December.
    3. Bond, Gary E. & Wonder, Bernard, 1980. "Risk Attitudes Amongst Australian Farmers," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(01), April.
    4. Amemiya, Takeshi, 1973. "Regression Analysis when the Dependent Variable is Truncated Normal," Econometrica, Econometric Society, vol. 41(6), pages 997-1016, November.
    5. Huang, Chung L. & Fletcher, Stanley M. & Raunikar, Robert, 1981. "Modeling The Effects Of The Food Stamp Program On Participating Households' Purchases: An Empirical Application," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 13(02), December.
    6. Niewuwoudt, W.L. & Bullock, J. Bruce, 1985. "The Demand for Crop Insurance," 1985 Conference, August 26-September 4, 1985, Málaga, Spain 183028, International Association of Agricultural Economists.
    7. Huang, Chung L. & Fletcher, Stanley M. & Raunikar, Robert, 1981. "Modeling the Effects of the Food Stamp Program on Participating Households' Purchases: An Empirical Application," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 13(02), pages 21-28, December.
    8. McDonald, John F & Moffitt, Robert A, 1980. "The Uses of Tobit Analysis," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 318-321, May.
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