Hail Insurance and Pesticide use in French agriculture: an empirical analysis of multiple risks management
This paper investigates the determinants of rapeseed hail insurance and pesticide use decisions using individual panel data set of French farms covering the period from 1993 to 2004. Economic theory suggests that insurance and prevention decisions are not independent due to risk reduction and/or moral hazard effects. Statistical tests show that the pesticide use and hail insurance demand are endogenous to each other. An econometric model involving two simultaneous equations with a mixed censored/continuous dependent variables is then estimated. Estimation results show that rapeseed insurance demand has a positive and significant effect on pesticide use and vice versa. Insurance demand is also positively influenced by the yield’s coefficient of variation and the loss ratio, and negatively influenced by proxies for wealth (including CAP subsidies) and activity diversification.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.eaae.org|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- William Greene, 2004. "Fixed Effects and Bias Due to the Incidental Parameters Problem in the Tobit Model," Econometric Reviews, Taylor & Francis Journals, vol. 23(2), pages 125-147.
- Phoebe Koundouri & Marita Laukkanen & Sami MyyrÃ¤ & Celine Nauges, 2009.
"The effects of EU agricultural policy changes on farmers' risk attitudes,"
30225, Institut National de la Recherche Agronomique, France.
- Phoebe Koundouri & Marita Laukkanen & Sami Myyrä & Céline Nauges, 2009. "The effects of EU agricultural policy changes on farmers' risk attitudes," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 36(1), pages 53-77, March.
- Vincent H. Smith & Alan E. Baquet, 1996. "The Demand for Multiple Peril Crop Insurance: Evidence from Montana Wheat Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 189-201.
- JunJie Wu, 1999. "Crop Insurance, Acreage Decisions, and Nonpoint-Source Pollution," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(2), pages 305-320.
- Amemiya, Takeshi, 1974. "Multivariate Regression and Simultaneous Equation Models when the Dependent Variables Are Truncated Normal," Econometrica, Econometric Society, vol. 42(6), pages 999-1012, November.
- Erik J. O'Donoghue & Michael J. Roberts & Nigel Key, 2009. "Did the Federal Crop Insurance Reform Act Alter Farm Enterprise Diversification?," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(1), pages 80-104.
- Richard E. Just & Linda Calvin & John Quiggin, 1999.
"Adverse Selection in Crop Insurance: Actuarial and Asymmetric Information Incentives,"
American Journal of Agricultural Economics,
Agricultural and Applied Economics Association, vol. 81(4), pages 834-849.
- Just, Richard E. & Calvin, Linda & Quiggin, John, 1993. "Adverse Selection in Crop Insurance: Actuarial and Asymmetric Information Incentives," Working Papers 197809, University of Maryland, Department of Agricultural and Resource Economics.
- Kirwan, Barrett E., 2009. "Adversity and the Propensity to Fail: The Impact of Disaster Payments and Multiple Peril Crop Insurance on U.S. Farm Exit Rates," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49569, Agricultural and Applied Economics Association.
- Innes, Robert, 1990. "Government Target Price Intervention in Economies with Incomplete Markets," The Quarterly Journal of Economics, MIT Press, vol. 105(4), pages 1035-52, November.
- Rulon D. Pope, 2003. "Agricultural Risk Analysis: Adequacy of Models, Data, and Issues," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1249-1256.
- Just, Richard E., 2000. "Some Guiding Principles For Empirical Production Research In Agriculture," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 29(2), October.
- Chavas, Jean-Paul & Holt, Matthew T, 1996. "Economic Behavior under Uncertainty: A Joint Analysis of Risk Preferences and Technology," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 329-35, May.
- Barry K. Goodwin & Monte L. Vandeveer & John L. Deal, 2004. "An Empirical Analysis of Acreage Effects of Participation in the Federal Crop Insurance Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 1058-1077.
When requesting a correction, please mention this item's handle: RePEc:ags:eaae11:114312. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.