IDEAS home Printed from https://ideas.repec.org/p/lam/wpaper/08-06.html
   My bibliography  Save this paper

The main determinants of insurance purchase. An empirical study on crop insurance policies in France

Author

Listed:
  • Geoffroy Enjolras
  • Patrick Sentis

Abstract

Using data for 2002-2005 on a representative survey of French farms (FADN-RICA), we investigate the different factors that lead farmers to insure against crop risk. Our analysis takes into account a mix of both standard individual, financial and agricultural criteria. Cross-sectional and longitudinal analyses as well as logistic regressions underline the main differences between insured and non-insured farms. Compared to non-insured farms, we find that insured farms present greater financial and agricultural sizes, a more diversified production and have been motivated by the occurrence of recent catastrophic climatic events. Although essential in the cross-sectional analysis, the influence of financial parameters in the decision to insure is mitigated. On the other hand, the agricultural characteristics of the farms confirm their leading influence for the subscription of crop insurance policies.

Suggested Citation

  • 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.
    • Handle: RePEc:lam:wpaper:08-06
    as

    Download full text from publisher

    File URL: http://www.lameta.univ-montp1.fr/Documents/DR2008-06.pdf
    File Function: First version, 2008
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alberto Garrido & David Zilberman, 2008. "Revisiting the demand for agricultural insurance: the case of Spain," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 68(1), pages 43-66, May.
    2. Hanno N. Lustig & Stijn G. Van Nieuwerburgh, 2005. "Housing Collateral, Consumption Insurance, and Risk Premia: An Empirical Perspective," Journal of Finance, American Finance Association, vol. 60(3), pages 1167-1219, June.
    3. Keith H. Coble & Thomas O. Knight & Rulon D. Pope & Jeffery R. Williams, 1996. "Modeling Farm-Level Crop Insurance Demand with Panel Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 439-447.
    4. 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.
    5. Isengildina, Olga & Hudson, Darren, 2001. "Factors Affecting Hedging Decisions Using Evidence from the Cotton Industry," 2001 Conference, April 23-24, 2001, St. Louis, Missouri 18970, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    6. Teresa Serra & Barry K. Goodwin & Allen M. Featherstone, 2003. "Modeling changes in the U.S. demand for crop insurance during the 1990s," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 63(2), pages 109-125, November.
    7. Byeongyong Paul Choi & Mary A. Weiss, 2005. "An Empirical Investigation of Market Structure, Efficiency, and Performance in Property‐Liability Insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 72(4), pages 635-673, December.
    8. H. Holly Wang & Hao Zhang, 2003. "On the Possibility of a Private Crop Insurance Market: A Spatial Statistics Approach," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 70(1), pages 111-124, March.
    9. Martin F. Grace & Robert W. Klein & Paul R. Kleindorfer, 2004. "Homeowners Insurance With Bundled Catastrophe Coverage," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 71(3), pages 351-379, September.
    10. Joseph W. Glauber, 2004. "Crop Insurance Reconsidered," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(5), pages 1179-1195.
    11. Bruce J. Sherrick & Peter J. Barry & Paul N. Ellinger & Gary D. Schnitkey, 2004. "Factors Influencing Farmers' Crop Insurance Decisions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 103-114.
    12. Bruce J. Sherrick & Gary D. Schnitkey & Paul N. Ellinger & Peter J. Barry & Brian Wansink, 2003. "Farmers' Preferences for Crop Insurance Attributes," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 415-429.
    13. Brian Wansink, 2003. "Farmers' Preferences for Crop Insurance Attributes," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 415-429.
    14. Marcel A.P.M. van Asseldonk & Miranda P.M. Meuwissen & Ruud B.M. Huirne, 2002. "Belief in Disaster Relief and the Demand for a Public-Private Insurance Program," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(1), pages 196-207.
    15. Steven C. Blank & Jeffrey McDonald, 1996. "Preferences for crop insurance when farmers are diversified," Agribusiness, John Wiley & Sons, Ltd., vol. 12(6), pages 583-592.
    16. Marcel A.P.M. van Asseldonk & Miranda P.M. Meuwissen & Ruud B.M. Huirne, 2002. "Belief in Disaster Relief and the Demand for a Public-Private Insurance Program," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(1), pages 196-207.
    17. 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.
    18. Mary Kelly & Anne E. Kleffner, 2003. "Optimal Loss Mitigation and Contract Design," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 70(1), pages 53-72, March.
    19. Niehaus, Greg, 2002. "The allocation of catastrophe risk," Journal of Banking & Finance, Elsevier, vol. 26(2-3), pages 585-596, March.
    20. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sporri, Martina & Baráth, Lajos & Bokusheva, Raushan & Ferto, Imre, 2012. "The Impact of Crop Insurance on the Economic Performance of Hungarian Cropping Farms," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122525, European Association of Agricultural Economists.
    2. 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.
    3. Enjolras, Geoffroy & Capitanio, Fabian & Adinolfi, Felice, 2012. "The Demand for Crop Insurance: Combined Approaches for France and Italy," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 13(1), pages 1-18.
    4. Mauro Vigani & Jonas Kathage, 2019. "To Risk or Not to Risk? Risk Management and Farm Productivity," American Journal of Agricultural Economics, John Wiley & Sons, vol. 101(5), pages 1432-1454, October.
    5. Lajos Barath & Raushan Bokusheva & Imre Ferto, 2016. "Studying Farm Insurance Demand under Financial Constraints," CERS-IE WORKING PAPERS 1625, Institute of Economics, Centre for Economic and Regional Studies.
    6. Finger, Robert & Lehmann, Niklaus, 2011. "Do Direct Payments Influence Farmers' Hail Insurance Decisions?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114355, European Association of Agricultural Economists.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. 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.
    3. Ming Wang & Tao Ye & Peijun Shi, 2016. "Factors Affecting Farmers’ Crop Insurance Participation in China," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 64(3), pages 479-492, September.
    4. Fabio G., Santeramo & Ilaria, Russo & Emilia, Lamonaca, 2022. "Italian subsidised crop insurance: what the role of policy changes," MPRA Paper 115299, University Library of Munich, Germany.
    5. F. G. Santeramo & B. K. Goodwin & F. Adinolfi & F. Capitanio, 2016. "Farmer Participation, Entry and Exit Decisions in the Italian Crop Insurance Programme," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(3), pages 639-657, September.
    6. Mbonane, Nobuhle Duduzile, 2018. "An analysis of farmers’ preferences for crop insurance: a case of maize farmers in Swaziland," Research Theses 334771, Collaborative Masters Program in Agricultural and Applied Economics.
    7. Heidelbach, Olaf, 2007. "Efficiency of selected risk management instruments: An empirical analysis of risk reduction in Kazakhstani crop production," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 40, number 92323.
    8. Rogna, Marco & Schamel, Günter & Weissensteiner, Alex, 2019. "Choosing Between Hail Insurance and Anti-Hail Nets: A Simple Model and a Simulation among Apples Producers in South Tyrol," 2019: Trading for Good - Agricultural Trade in the Context of Climate Change Adaptation and Mitigation... Symposium, June 23-25, 2019, Seville, Spain 312593, International Agricultural Trade Research Consortium.
    9. 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.
    10. Marco Rogna & Günter Schamel & Alex Weissensteiner, 2023. "Modelling the switch from hail insurance to antihail nets," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(1), pages 118-136, January.
    11. 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.
    12. Chen, Shu-Ling & Miranda, Mario J., 2006. "Modeling Yield Distribution In High Risk Counties: Application To Texas Upland Cotton," 2006 Annual meeting, July 23-26, Long Beach, CA 21392, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Smith, Vincent H. & Glauber, Joseph & Dismukes, Robert, 2016. "Rent Dispersion in the US Agricultural Insurance Industry:," IFPRI discussion papers 1532, International Food Policy Research Institute (IFPRI).
    14. He, Juan & Zheng, Xiaoyong & Rejesus, Roderick M. & Yorobe Jr., Jose M., 2019. "Moral hazard and adverse selection effects of cost-of-production crop insurance: evidence from the Philippines," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(1), January.
    15. 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).
    16. Woodard, Joshua D. & Chiu Verteramo, Leslie & Miller, Alyssa P., 2015. "Adaptation of U.S. Agricultural Production to Drought and Climate Change," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205903, Agricultural and Applied Economics Association.
    17. Juan He & Roderick Rejesus & Xiaoyong Zheng & Jose Yorobe, 2018. "Advantageous Selection in Crop Insurance: Theory and Evidence," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(3), pages 646-668, September.
    18. Lajos Barath & Raushan Bokusheva & Imre Ferto, 2016. "Studying Farm Insurance Demand under Financial Constraints," CERS-IE WORKING PAPERS 1625, Institute of Economics, Centre for Economic and Regional Studies.
    19. Enjolras, Geoffroy & Capitanio, Fabian & Adinolfi, Felice, 2012. "The Demand for Crop Insurance: Combined Approaches for France and Italy," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 13(1), pages 1-18.
    20. H. Holly Wang & Lu Liu & David L. Ortega & Yu Jiang & Qiujie Zheng, 2020. "Are smallholder farmers willing to pay for different types of crop insurance? An application of labelled choice experiments to Chinese corn growers," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 45(1), pages 86-110, January.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lam:wpaper:08-06. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Patricia Modat (email available below). General contact details of provider: https://edirc.repec.org/data/lamplfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.