IDEAS home Printed from https://ideas.repec.org/a/ags/joaaec/43393.html
   My bibliography  Save this article

Patterns of Collusion in the U.S. Crop Insurance Program: An Empirical Analysis

Author

Listed:
  • Rejesus, Roderick M.
  • Little, Bertis B.
  • Lovell, Ashley C.
  • Cross, Mike H.
  • Shucking, Michael

Abstract

This article analyzes anomalous patterns of agent, adjuster, and producer claim outcomes and determines the most likely pattern of collusion that is suggestive of fraud, waste, and abuse in the federal crop insurance program. Log-linear analysis of Poisson-distributed counts of anomalous entities is used to examine potential patterns of collusion. The most likely pattern of collusion present in the crop insurance program is where agents, adjusters, and producers nonrecursively interact with each other to coordinate their behavior. However, if a priori an intermediary is known to initiate and coordinate the collusion, a pattern where the producer acts as the intermediary is the most likely pattern of collusion evidenced in the data. These results have important implications for insurance program design and compliance.

Suggested Citation

  • Rejesus, Roderick M. & Little, Bertis B. & Lovell, Ashley C. & Cross, Mike H. & Shucking, Michael, 2004. "Patterns of Collusion in the U.S. Crop Insurance Program: An Empirical Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 36(2), pages 1-17, August.
    • Handle: RePEc:ags:joaaec:43393
    DOI: 10.22004/ag.econ.43393
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/43393/files/Rejesus%20JAAE%20August%202004.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.43393?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
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Harwood, Joy L. & Heifner, Richard G. & Coble, Keith H. & Perry, Janet E. & Somwaru, Agapi, 1999. "Managing Risk in Farming: Concepts, Research, and Analysis," Agricultural Economic Reports 34081, United States Department of Agriculture, Economic Research Service.
    2. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    3. Pierre Picard, 2012. "Economic Analysis of Insurance Fraud," Working Papers hal-00725561, HAL.
    4. Ker, Alan P., 1999. "Private Insurance Companies and the U.S. Crop Insurance Program," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 14(3), pages 1-2.
    5. Alger, Ingela & Albert Ma, Ching-to, 2003. "Moral hazard, insurance, and some collusion," Journal of Economic Behavior & Organization, Elsevier, vol. 50(2), pages 225-247, February.
    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. Sungkwol Park & Xiaoyong Zheng & Roderick M. Rejesus & Barry K. Goodwin, 2022. "Somebody's watching me! Impacts of the spot check list program in U.S. crop insurance," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(3), pages 921-946, May.
    2. Rejesus, R. & Park, S. & Zheng, X. & Goodwin, G., 2018. "How does a Fraud Mitigation Program Influence Insurance Claims filing Behavior? Evidence from the "Spot Check List" Program in U.S. Crop Insurance," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277452, International Association of Agricultural Economists.
    3. Pierre Picard, 2012. "Economic Analysis of Insurance Fraud," Working Papers hal-00725561, HAL.
    4. Nathan D. DeLay & Hayley H. Chouinard & Cory G. Walters & Philip R. Wandschneider, 2020. "The influence of crop insurance agents on coverage choices: The role of agent competition," Agricultural Economics, International Association of Agricultural Economists, vol. 51(4), pages 623-638, July.
    5. Delay, Nathan & Chouinard, Hayley & Walters, Cory & Wandschneider, Philip, 2020. "Examining the Role of the Crop Insurance Selling Agent," Cornhusker Economics 307133, University of Nebraska-Lincoln, Department of Agricultural Economics.
    6. Peng, Sheng-Chang & Li, Chu-Shiu, 2024. "Bundled insurance coverage and asymmetric information: Claim patterns of automobile theft insurance in Taiwan," Pacific-Basin Finance Journal, Elsevier, vol. 84(C).

    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. Pierre Picard, 2012. "Economic Analysis of Insurance Fraud," Working Papers hal-00725561, HAL.
    2. M. Martin Boyer & Jörg Schiller, 2003. "Merging Automobile Insurance Regulatory Bodies: The Case of Atlantic Canada," CIRANO Working Papers 2003s-70, CIRANO.
    3. Chu-Shiu Li & Chwen-Chi Liu & Sheng-Chang Peng, 2013. "Expiration Dates in Automobile Insurance Contracts: The Curious Case of Last Policy Month Claims in Taiwan," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 38(1), pages 23-47, March.
    4. Nell, Martin & Schiller, Jörg, 2002. "Erklärungsansätze für vertragswidriges Verhalten von Versicherungsnehmern aus Sicht der ökonomischen Theorie," Working Papers on Risk and Insurance 7, University of Hamburg, Institute for Risk and Insurance.
    5. M. Martin Boyer & Richard Peter, 2020. "Insurance Fraud in a Rothschild–Stiglitz World," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 87(1), pages 117-142, March.
    6. Boyer, M. Martin & Schiller, Jörg, 2003. "Merging automobile regulatory bodies: The case of Atlantic Canada," Working Papers on Risk and Insurance 11, University of Hamburg, Institute for Risk and Insurance.
    7. John Lynham, 2012. "Ecomarkets For Conservation And Sustainable Development in the Coastal Zone," Working Papers 201218, University of Hawaii at Manoa, Department of Economics.
    8. Colin C Williams, 2021. "Tackling Undeclared Self-Employment in South-East Europe: from Deterrents to Preventative Policy Measures," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 280-298, July.
    9. Khalil, Umair, 2017. "Do more guns lead to more crime? Understanding the role of illegal firearms," Journal of Economic Behavior & Organization, Elsevier, vol. 133(C), pages 342-361.
    10. van Ours, Jan C. & Williams, Jenny & Ward, Shannon, 2015. "Bad Behavior: Delinquency, Arrest and Early School Leaving," CEPR Discussion Papers 10755, C.E.P.R. Discussion Papers.
    11. Doyle, Chris & Smith, Jennifer C, 1997. "Crime and Drugs : An Economic Approach," The Warwick Economics Research Paper Series (TWERPS) 477, University of Warwick, Department of Economics.
    12. Andrew M. McKenzie & Bingrong Jiang & Harjanto Djunaidi & Linwood A. Hoffman & Eric J. Wailes, 2002. "Unbiasedness and Market Efficiency Tests of the U.S. Rice Futures Market," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(2), pages 474-493.
    13. Christoph Engel, 2016. "Experimental Criminal Law. A Survey of Contributions from Law, Economics and Criminology," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2016_07, Max Planck Institute for Research on Collective Goods.
    14. Timothy Besley & Hannes Mueller, 2018. "Predation, Protection, and Productivity: A Firm-Level Perspective," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(2), pages 184-221, April.
    15. Martineau, Nicolas-Guillaume & de Vanssay, Xavier, 2019. "Sinning by omission: Insider trading and ethical behavior," Journal of Economics and Business, Elsevier, vol. 104(C), pages 1-1.
    16. Crinò, Rosario & Immordino, Giovanni & Piccolo, Salvatore, 2019. "Marginal deterrence at work," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 586-612.
    17. Mari Rege & Torbjørn Skardhamar & Kjetil Telle & Mark Votruba, 2009. "The effect of plant closure on crime," Discussion Papers 593, Statistics Norway, Research Department.
    18. Patrick Arni & Rafael Lalive & Jan C. Van Ours, 2013. "How Effective Are Unemployment Benefit Sanctions? Looking Beyond Unemployment Exit," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(7), pages 1153-1178, November.
    19. Ingela Alger & Régis Renault, 2006. "Screening Ethics When Honest Agents Care About Fairness ," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(1), pages 59-85, February.
    20. Dennis L. Gärtner, 2022. "Corporate Leniency in a Dynamic World: The Preemptive Push of an Uncertain Future," Journal of Industrial Economics, Wiley Blackwell, vol. 70(1), pages 119-146, March.

    More about this item

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q19 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Other

    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:joaaec:43393. 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/saeaaea.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.