IDEAS home Printed from https://ideas.repec.org/a/ags/jlaare/31189.html

On Choosing A Base Coverage Level For Multiple Peril Crop Insurance Contracts

Author

Listed:
  • Ker, Alan P.
  • Coble, Keith H.

Abstract

For multiple peril crop insurance, the U.S. Department of Agriculture's Risk Management Agency estimates the premium rate for a base coverage level and then uses multiplicative adjustment factors to recover rates at other coverage levels. Given this methodology, accurate estimation of the base coverage level from 65% to 50%. The purpose of this analysis was to provide some insight into whether such a change should or should not be carried out. Not surprisingly, our findings indicate that the higher coverage level should be maintained as the base.

Suggested Citation

  • Ker, Alan P. & Coble, Keith H., 1998. "On Choosing A Base Coverage Level For Multiple Peril Crop Insurance Contracts," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(2), pages 1-18, December.
    • Handle: RePEc:ags:jlaare:31189
    DOI: 10.22004/ag.econ.31189
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/31189/files/23020427.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.31189?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Charles B. Moss & J. S. Shonkwiler, 1993. "Estimating Yield Distributions with a Stochastic Trend and Nonnormal Errors," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(4), pages 1056-1062.
    2. Myers, Robert J. & Jayne, Thomas S., 1997. "Regime shifts and technology diffusion in crop yield growth paths with an application to maize yields in Zimbabwe," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 41(3), pages 1-19.
    3. Carl H. Nelson & Paul V. Preckel, 1989. "The Conditional Beta Distribution as a Stochastic Production Function," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(2), pages 370-378.
    4. Keith H. Coble & Thomas O. Knight & Rulon D. Pope & Jeffery R. Williams, 1996. "Modeling Farm-Level Crop Insurance Demand with Panel Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 439-447.
    5. Bruce A. Babcock & David A. Hennessy, 1996. "Input Demand under Yield and Revenue Insurance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 416-427.
    6. David A. Bessler, 1980. "Aggregated Personalistic Beliefs on Yields of Selected Crops Estimated Using ARIMA Processes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(4), pages 666-674.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ker, Alan P. & McGowan, Pat, 2000. "Weather-Based Adverse Selection And The U.S. Crop Insurance Program: The Private Insurance Company Perspective," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-25, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arora, Gaurav & Agarwal, Sandip K., 2020. "Agricultural input use and index insurance adoption: Concept and evidence," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304508, Agricultural and Applied Economics Association.
    2. Park, Eunchun & Brorsen, B. Wade & Harri, Ardian, 2016. "Using Bayesian Spatial Smoothing and Extreme Value Theory to Develop Area-Yield Crop Insurance Rating," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235754, Agricultural and Applied Economics Association.
    3. repec:isu:genstf:201701010800006248 is not listed on IDEAS
    4. Ghahremanzadeh, Mohammad & Mohammadrezaei, Rassul & Dashti, Ghader & Ainollahi, Moharram, . "Designing a whole-farm revenue insurance for agricultural crops in Zanjan province of Iran," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 17(02).
    5. Makki Shiva S. & Somwaru Agapi L., 2007. "Assessing Adverse Selection in Crop Insurance Markets: An Application of Parametric and Nonparametric Methods," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 2(1), pages 1-22, May.
    6. Chen, Xiaomei & Wang, H. Holly & Makus, Larry D., 2007. "Production Risk and Crop Insurance Effectiveness: Organic Versus Conventional Apples," SCC-76 Meeting, 2007, March 15-17, Gulf Shores, Alabama 9381, SCC-76: Economics and Management of Risk in Agriculture and Natural Resources.
    7. Ramirez, Octavio A. & McDonald, Tanya U., 2006. "The Expanded Johnson System: A Highly Flexible Crop Yield Distribution Model," 2006 Annual meeting, July 23-26, Long Beach, CA 21455, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Clop-Gallart, M. Merce & Juarez-Rubio, Francisco, 2005. "Elicitation of Subjective Crop Yield PDF for DSS Implementation," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24561, European Association of Agricultural Economists.
    9. Coleman, Jane A. & Shaik, Saleem, 2009. "Time-Varying Estimation of Crop Insurance Program in Altering North Dakota Farm Economic Structure," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49516, Agricultural and Applied Economics Association.
    10. Jesse B. Tack & David Ubilava, 2015. "Climate and agricultural risk: measuring the effect of ENSO on U.S. crop insurance," Agricultural Economics, International Association of Agricultural Economists, vol. 46(2), pages 245-257, March.
    11. Xiaodong Du & David A. Hennessy & Cindy L. Yu, 2012. "Testing Day's Conjecture that More Nitrogen Decreases Crop Yield Skewness," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 225-237.
    12. Liang, Weifang & Liu, Yong, 2023. "Rating Crop Insurance Contracts with Model Stacking of Gaussian Processes," 2023 Annual Meeting, July 23-25, Washington D.C. 335759, Agricultural and Applied Economics Association.
    13. repec:isu:genstf:1999010108000013154 is not listed on IDEAS
    14. Christophe Gouel, 2013. "Rules versus Discretion in Food Storage Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(4), pages 1029-1044.
    15. Coble, Keith H. & Heifner, Richard G. & Zuniga, Manuel, 2000. "Implications Of Crop Yield And Revenue Insurance For Producer Hedging," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-21, December.
    16. Bhaskar, Arathi & Beghin, John C., 2007. "Decoupled Farm Payments and the Role of Base Updating Under Uncertainty," Working Papers 7350, Iowa State University, Department of Economics.
    17. Umarov, Alisher & Sherrick, Bruce J., 2005. "Farmers' Subjective Yield Distributions: Calibration and Implications for Crop Insurance Valuation," 2005 Annual meeting, July 24-27, Providence, RI 19396, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Jeremy G. Weber & Nigel Key & Erik O’Donoghue, 2016. "Does Federal Crop Insurance Make Environmental Externalities from Agriculture Worse?," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(3), pages 707-742.
    19. Chad E. Hart & Dermot J. Hayes & Bruce A. Babcock, 2006. "Insuring Eggs in Baskets: Should the Government Insure Individual Risks?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(1), pages 121-137, March.
    20. Seo, Sangtaek & Mitchell, Paul D. & Leatham, David J., 2004. "Effects Of Federal Risk Management Programs On Land Allocation And Input Use," 2004 Annual meeting, August 1-4, Denver, CO 20160, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    21. Jutta Roosen & David A. Hennessy, 2003. "Tests for the Role of Risk Aversion on Input Use," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 30-43.
    22. Coble, Keith H. & Barnett, Barry J., 1999. "The Role Of Research In Producer Risk Management," Professional Papers 15803, Mississippi State University, Department of Agricultural Economics.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jlaare:31189. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/waeaaea.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.