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Adverse Selection Risk Early-Warning of Agricultural Insurance Towards Food Quality Safety — Illustrated by an example of vegetable sites in Shandong province

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  • Zhang Dongling

    (School of Economics, Qingdao University, Qingdao266071, China)

  • Yang Zehui

    (China Certification & Accreditation Institute, Beijing100020, China)

Abstract

From the perspective of the agricultural food quality safety, for the adverse selection because of the asymmetric information in agricultural insurance, an analysis approach based on multi-classification discrete choice model is proposed. On the basis of building an agricultural food safety risk evaluation index system, applying the linguistic information processing method, the panel valuation data is aggregated to obtain the integrated evaluation values. An ordered logistic model is put forward, and the calculation analysis steps are given. This research is illustrated by an example of export vegetable sites in Shandong province. The research indicates that the quality safety is the new component of agricultural risk, and the effective risk analysis can be on guard against the adverse selection in agricultural insurance practice. As well the linguistic information can be effectively aggregated with less lost by this method, the classes of agricultural food quality risk are ordinal, and approach will promote the extension and application in agricultural insurance to crop farming.

Suggested Citation

  • Zhang Dongling & Yang Zehui, 2015. "Adverse Selection Risk Early-Warning of Agricultural Insurance Towards Food Quality Safety — Illustrated by an example of vegetable sites in Shandong province," Journal of Systems Science and Information, De Gruyter, vol. 3(3), pages 248-263, June.
    • Handle: RePEc:bpj:jossai:v:3:y:2015:i:3:p:248-263:n:4
    DOI: 10.1515/JSSI-2015-0248
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    References listed on IDEAS

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