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Research on the insurance of swimming crab temperature and salinity index insurance based on Copula function

Author

Listed:
  • Xiaofang Shi
  • Mingjie Zhao
  • Yu Xu
  • Yanjuan Wu
  • Xiaolin Sun
  • Ke Jin
  • Bo Qiu
  • Chao Gao

Abstract

Under climate change, the sea surface temperature and salinity change greatly, which poses a considerable threat to sustainable food security. Sea surface temperature and salinity (SST/SSS) are selected to examine the annual output of swimming crab in 24 cities along the eastern China. The Copula-based function was used to construct the probability distribution model of the swimming crab yield with SST and SSS. The pure premium rate of the swimming crab production in these 24 cities are also examined. The results show that 1) There is significant positive correlations between the yield of swimming crab with temperature and salinity over the study area. The only exception is that the correlation between yield of swimming crab and salinity is not significant in the south of study area. 2) The span of the pure insurance premium rate of swimming crab in 24 cities increases rapidly with the increase of the protection level, the maximum span up to 2.04%, and the minimum span is only 1.6%. 3) The distribution of the swimming crab insurance premium rate is various in space. The insurance premium rate of 8 cities in the south of Taizhou is low with the highest premium rate at 5.6%. The insurance premium rate of 16 cities in north of Taizhou is relatively high with the rate between 6%-22%. The research can provide a theoretical basis for the pricing of insurance products for swimming crab in 24 cities in the typical aquaculture areas in eastern China.

Suggested Citation

  • Xiaofang Shi & Mingjie Zhao & Yu Xu & Yanjuan Wu & Xiaolin Sun & Ke Jin & Bo Qiu & Chao Gao, 2022. "Research on the insurance of swimming crab temperature and salinity index insurance based on Copula function," PLOS ONE, Public Library of Science, vol. 17(8), pages 1-15, August.
    • Handle: RePEc:plo:pone00:0272940
    DOI: 10.1371/journal.pone.0272940
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    References listed on IDEAS

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    1. Duarte, Gislaine Vieira & Ozaki, Vitor Augusto, 2019. "Pricing Crop Revenue Insurance using Parametric Copulas," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 73(3), September.
    2. Skees, Jerry R. & Hazell, Peter B.R. & Miranda, Mario J., 1999. "New Approaches to Crop Yield Insurance in Developing Countries," EPTD Discussion Papers 42827, CGIAR, International Food Policy Research Institute (IFPRI).
    3. Andrew J. Patton, 2006. "Modelling Asymmetric Exchange Rate Dependence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(2), pages 527-556, May.
    4. Hazell, P. B. R. & Miranda, Mario & Skees, Jerry, 1999. "New approaches to crop yield insurance in developing countries:," EPTD discussion papers 55, International Food Policy Research Institute (IFPRI).
    5. Peng Shi & Gee Y. Lee, 2022. "Copula Regression for Compound Distributions with Endogenous Covariates with Applications in Insurance Deductible Pricing," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 117(539), pages 1094-1109, September.
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