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Willingness To Pay For Potential Standing Timber Insurance

Author

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  • DENG, YILING
  • MUNN, IAN A.
  • COBLE, KEITH
  • YAO, HAIBO

Abstract

Landowners rarely insure standing timber, suggesting the limited products available do not appeal to potential clientele. We estimated landowner willingness to pay (WTP) for standing timber insurance. Data were generated through a contingent valuation survey. Questionnaires were mailed to a random sample of Mississippi private forest landowners with 100+ acres of forestland. WTP for standing timber insurance was derived using an interval-censored survival model and a Kaplan-Meier Turnbull nonparametric model. The estimated WTP premium rate was approximately $3.20 per $1,000 of standing timber value, well below existing premium rates. This partially explains the underinsurance of standing timber among landowners.

Suggested Citation

  • Deng, Yiling & Munn, Ian A. & Coble, Keith & Yao, Haibo, 2015. "Willingness To Pay For Potential Standing Timber Insurance," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 47(4), pages 510-538, November.
    • Handle: RePEc:cup:jagaec:v:47:y:2015:i:04:p:510-538_00
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    Citations

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    Cited by:

    1. Feng, Xin & Dai, Yongwu, 2019. "An innovative type of forest insurance in China based on the robust approach," Forest Policy and Economics, Elsevier, vol. 104(C), pages 23-32.
    2. Shrestha, Anusha & Grala, Robert K. & Grado, Stephen C. & Roberts, Scott D. & Gordon, Jason S. & Adhikari, Ram K., 2021. "Nonindustrial private forest landowner willingness to pay for prescribed burning to lower wildfire hazards," Forest Policy and Economics, Elsevier, vol. 127(C).
    3. Cipollaro, Maria & Sacchelli, Sandro, 2018. "Demand and potential subsidy level for forest insurance market in Demand and potential subsidy level for forest insurance market in Italy," 2018 Seventh AIEAA Conference, June 14-15, Conegliano, Italy 275647, Italian Association of Agricultural and Applied Economics (AIEAA).
    4. Sandrine Brèteau-Amores & Marielle Brunette & Christophe François & Antoine Leblois & Nicolas Martin-StPaul, 2021. "Index insurance for coping with drought-induced risk of production losses in French forests," Working Papers hal-03401881, HAL.
    5. Sauter, Philipp A. & Möllmann, Torsten B. & Anastassiadis, Friederike & Mußhoff, Oliver & Möhring, Bernhard, 2016. "To insure or not to insure? Analysis of foresters' willingness-to-pay for fire and storm insurance," Forest Policy and Economics, Elsevier, vol. 73(C), pages 78-89.
    6. M. Brunette & S. Couture & J. Foncel & S. Garcia, 2020. "The decision to insure against forest fire risk: an econometric analysis combining hypothetical real data," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 45(1), pages 111-133, January.
    7. Yiling Deng & Ian A. Munn & Haibo Yao, 2021. "Attributes‐based conjoint analysis of landowner preferences for standing timber insurance," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 24(4), pages 421-444, December.
    8. Sacchelli, Sandro & Cipollaro, Maria & Fabbrizzi, Sara, 2018. "A GIS-based model for multiscale forest insurance analysis: The Italian case study," Forest Policy and Economics, Elsevier, vol. 92(C), pages 106-118.
    9. Marielle Brunette & Stéphane Couture & Jérôme Foncel & Serge S. Garcia, 2017. "Insurance decision against forest fire : An econometric analysis combining experimental and real data," Post-Print hal-02785187, HAL.
    10. Marielle Brunette & Marc Hanewinkel, 2021. "Assurance financière et assurance naturelle : une application à la forêt," Working Papers of BETA 2021-28, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.

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