Is there a viable market for area-based crop insurance?

Xiaohui Deng, Barry J. Barnett, Dmitry V. Vedenov

Research output: Contribution to journalArticlepeer-review

40 Scopus citations

Abstract

The performance of area yield insurance and farm-level multiple peril crop insurance is analyzed for cotton and soybean production in Georgia and South Carolina. The analysis improves on many previous studies by utilizing actual farm-level yield data and by comparing the two types of insurance products not only for actuarially fair premium rates but also for actual unsubsidized and subsidized premium rates. Results suggest that, even in heterogeneous production regions, area yield insurance may be a viable alternative to farm-level insurance when premium rates for farm-level insurance contain large positive wedges.

Original languageEnglish
Pages (from-to)508-519
Number of pages12
JournalAmerican Journal of Agricultural Economics
Volume89
Issue number2
DOIs
StatePublished - May 2007

Keywords

  • Area yield insurance
  • Crop insurance
  • Group Risk Plan
  • Risk management

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics

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