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Modeling Changes In The U.S. Demand For Crop Insurance During The 1990s

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  • Serra, Teresa
  • Goodwin, Barry K.
  • Featherstone, Allen M.

Abstract

The crop insurance purchase decision for a group of Kansas farmers is analyzed using data from 1990s-a period that experienced many changes in the federal crop insurance program. Farm-level data are used. Results indicate a reduction in the elasticity of the demand for crop insurance with respect to premium rates by the end of the decade. This corresponded with a considerable increase in government subsidies by the end of the 1990s. This may also reflect the attractiveness of new revenue insurance products that may have made producers less sensitive to premium changes.

Suggested Citation

  • Serra, Teresa & Goodwin, Barry K. & Featherstone, Allen M., 2003. "Modeling Changes In The U.S. Demand For Crop Insurance During The 1990s," 2003 Annual meeting, July 27-30, Montreal, Canada 22019, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea03:22019
    DOI: 10.22004/ag.econ.22019
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    1. Lee, Lung-fei & Maddala, G S & Trost, R P, 1980. "Asymptotic Covariance Matrices of Two-Stage Probit and Two-Stage Tobit Methods for Simultaneous Equations Models with Selectivity," Econometrica, Econometric Society, vol. 48(2), pages 491-503, March.
    2. Barnett, Barry J. & Skees, Jerry R. & Hourigan, James D., 1990. "Explaining Participation in Federal Crop Insurance," 1990 Annual meeting, August 5-8, Vancouver, Canada 270875, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Barry K. Goodwin, 1993. "An Empirical Analysis of the Demand for Multiple Peril Crop Insurance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(2), pages 425-434.
    4. Thomas O. Knight & Keith H. Coble, 1997. "Survey of U.S. Multiple Peril Crop Insurance Literature Since 1980," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 19(1), pages 128-156.
    5. Barry K. Goodwin, 2001. "U.S. Farm Safety Nets and the 2000 Agricultural Risk Protection Act," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 49(4), pages 543-555, December.
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    Cited by:

    1. Lee, Dong Won & Diersen, Matthew A. & Janssen, Larry & Gustafson, Cole R., 2006. "Premium Subsidy Changes and Demand for Crop Insurance," 2006 Agricultural and Rural Finance Markets in Transition, October 2-3, 2006, Washington, DC 133086, Regional Research Committee NC-1014: Agricultural and Rural Finance Markets in Transition.
    2. Jing Yi & Henry L. Bryant & James W. Richardson, 2020. "How do premium subsidies affect crop insurance demand at different coverage levels: the case of corn," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 45(1), pages 5-28, January.
    3. Salazar, Cesar & Jaime, Marcela & Pinto, Cristian & Acuna, Andres, 2019. "Interaction between crop insurance and technology adoption decisions: The case of wheat farmers in Chile," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(3), July.
    4. Di Falco, Salvatore & Capitanio, Fabian & Adinolfi, Felice, 2011. "Natural Vs Financial Insurance in the Management of Weather Risk Exposure in the Italian Agriculture," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114325, European Association of Agricultural Economists.
    5. Guoyong Wu & Jianwei Cheng & Fan Yang, 2022. "The Influence of the Peer Effect on Farmers’ Agricultural Insurance Decision: Evidence from the Survey Data of the Karst Region in China," Sustainability, MDPI, vol. 14(19), pages 1-14, September.
    6. Ibrahima Sall & Russell Tronstad, 2021. "Simultaneous Analysis of Insurance Participation and Acreage Response from Subsidized Crop Insurance for Cotton," JRFM, MDPI, vol. 14(11), pages 1-20, November.
    7. Richard KOENIG & Marielle BRUNETTE, 2023. "Subjective barriers and determinants to crop insurance adoption," Working Papers of BETA 2023-25, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    8. Wei Wang & Chongmei Zhang & Yan Guo & Dingde Xu, 2021. "Impact of Environmental and Health Risks on Rural Households’ Sustainable Livelihoods: Evidence from China," IJERPH, MDPI, vol. 18(20), pages 1-15, October.
    9. Shaik, Saleem & Coble, Keith H. & Knight, Thomas O. & Baquet, Alan E. & Patrick, George F., 2008. "Crop Revenue and Yield Insurance Demand: A Subjective Probability Approach," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 40(3), pages 1-10, December.
    10. Ginder, Matthew G. & Spaulding, Aslihan D., 2006. "Factors Affecting Crop Insurance Purchase Decisions in Northern Illinois," 2006 Annual meeting, July 23-26, Long Beach, CA 21073, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Geoffroy Enjolras & Patrick Sentis, 2008. "The main determinants of insurance purchase. An empirical study on crop insurance policies in France," Working Papers 08-06, LAMETA, Universtiy of Montpellier, revised Apr 2008.
    12. 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.
    13. Dimitar Nikolov & Sergio Gomez-y-Paloma & Minka Chopeva & Marianne Lefebvre, 2014. "Main Factors of the Development and Attractiveness of the Insurance Market for the Agricultural Companies," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 99-121.
    14. Claassen, Roger & Lubowski, Ruben N. & Roberts, Michael J., 2005. "Extent, Location, and Characteristics of Land Cropped Due to Insurance Subsidies," 2005 Annual meeting, July 24-27, Providence, RI 19546, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Lavorato, M. & Braga, M., 2018. "Assessing the effects of premium subsidies on crop insurance demand: An analysis for grain production in Southern Brazil," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276025, International Association of Agricultural Economists.
    16. Dimitre NIKOLOV & Minka CHOPEVA, 2016. "Assessment Of Factors Influencing Farm Insurance In Bulgaria Through Probability Statistical Methods," Agricultural Economics and Rural Development, Institute of Agricultural Economics, vol. 13(1), pages 3-12.
    17. 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.

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