All-Risk Crop Insurance: Lessons from Theory and Experience

Wright, Brian D.; Hewitt, Julie

doi:10.1007/978-94-011-1386-1_4

Cited by 75 publications

(41 citation statements)

References 16 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Here, it is clear that the evolution of wealth and income in all forms, and consumption, "cause" production choices. Although this point is not new (e.g., Wright and Hewitt 1994), it has not been formally modeled and estimated.…”

Section: Discussionmentioning

confidence: 99%

Risk Response in Agriculture

LaFrance

Pope

Tack

2011

View full text Add to dashboard Cite

Crop production is subject to supply shocks, and both expected and realized outputs as well as output prices are unknown when inputs are chosen. The process by which producers form expectations is difficult to model, especially when working with aggregate data. We present a necessary and sufficient condition on cost and technology to allow variable input demand equations to be specified as functions of input prices, quasi-fixed inputs, and total variable cost. These all are observable when inputs are committed to production, so that ex ante demands can be estimated with observable data. A flexible, exactly aggregable, and economically regular model of variable input demands is derived and applied to aggregate U.S. agricultural data for the period 1960-1999. We use the empirical results of this model to aid in the specification of a dynamic life-cycle model for agricultural producers facing output and output price risk, with investment in an off-farm, conditionally risk free asset, risky financial assets, savings, consumption, and agricultural production opportunities. This framework admits a coherent, structural, econometric model of input use, output production, savings, investment, and consumption for agricul-ture. We apply this model to U.S. data for the period 1960-1999. Ongoing work focuses on updating the data set to the 21st century and applying both components of the model at the state-level.

show abstract

Section: Discussionmentioning

confidence: 99%

Risk Response in Agriculture

LaFrance

Pope

Tack

2011

View full text Add to dashboard Cite

show abstract

“…Wright and Hewitt (1994) and Makki (2002) argue that the main problem behind low demand for insurance is not market failure, but rather that the perceived risk diversification benefits of insurance are less than the value of the premium. Other risk responses include income diversification through multi-cropping and off-farm employment and inter-temporal reallocation of income through savings and borrowing (Siegel and Alwang, 1999).…”

Section: Alternative Risk Mitigation Mechanismsmentioning

confidence: 99%

Agriculture and Adaptation to Climate Change: The Role of Insurance in Risk Management: The Case of Colombia

Romero¹,

Molina²

2015

View full text Add to dashboard Cite

work is licensed under a Creative Commons IGO 3.0 AttributionNonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Note that link provided above includes additional terms and conditions of the license. AbstractInsurance can potentially play an important role in climate change adaptation for rural households in developing countries as part of the overall climate change adaptation strategy. However, agricultural insurance markets have many market failures that inhibit their full development. In Colombia these market failures, namely information asymmetries and high transaction costs, are amplified by the country's difficult topography, poor infrastructure, and history of rural violence. Even though the government provides premium subsidies to increase coverage, it is still very low and important crops and small producers are not covered. This paper analyzes in detail the market constraints on the development of the agricultural insurance market in Colombia and provides recommendations so that it can fulfill its potential as a risk management tool in the country.JEL classifications: G22, Q1, Q14, Q54

show abstract

“…Currently, the US government provides a considerable share of reinsurance for crop insurance companies. Moreover, experiences from around the world reveal that, except for fire and hail crop insurance, private companies have not provided insurance against farm yield and revenue losses unless public assistance is provided (Wright and Hewitt, 1994;Tweeten and Zulauf, 1997).…”

Section: Risk As a Rationale For Farm Assistancementioning

confidence: 99%

US Farm Policy and Risk Assistance

Zulauf¹,

Orden²

2012

View full text Add to dashboard Cite

All-Risk Crop Insurance: Lessons from Theory and Experience

Cited by 75 publications

References 16 publications

Risk Response in Agriculture

Risk Response in Agriculture

Agriculture and Adaptation to Climate Change: The Role of Insurance in Risk Management: The Case of Colombia

US Farm Policy and Risk Assistance

Contact Info

Product

Resources

About