Estimation of Insurance Deductible Demand Under Endogenous Premium Rates

Woodard, Joshua D.; Yi, Jing

doi:10.1111/jori.12260

Cited by 19 publications

(26 citation statements)

References 40 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…However, some recent results go in an opposite way. Given that subsidy rates vary with coverage level, Woodard (2016) and Woodard and Yi (2018) considered the presence of endogeneity in the estimation of crop insurance demand, providing evidences of elastic responses from US farmers.…”

Section: Brief Literature Reviewmentioning

confidence: 99%

Premium subsidies and crop insurance demand in Brazil

Lavorato

Lelis

Braga

2019

AFR

View full text Add to dashboard Cite

Purpose The purpose of this paper is to examine the effects of premium subsidies provided by the Brazilian government through the Rural Insurance Premium Subvention Program (PSR) on the quantity demanded for crop insurance by grains producers of southern Brazil. Design/methodology/approach A fixed effects model was applied to an unbalanced panel data of municipalities of southern Brazil considering the years between 2006 and 2015. Three measures of crop insurance demand were considered: level of total premiums, level of total premiums per hectare and level of total liability per hectare. Findings Results were in line with previous literature, suggesting the existence of a positive, although inelastic, effect of the subsidy level on the demand for crop insurance. However, unitary elasticity estimates were found for all grains when considered total premiums per hectare as crop insurance demand measure. Originality/value The investigation focuses on a crop insurance program conducted in a tropical developing country – a completely different background than previously analyzed in literature. In addition, Brazilian government considers the PSR as one of its most important agricultural programs and this paper is pioneer in empirically explain the huge public investments made to the PSR through the estimation of the effects of premium subsidies on the quantity demanded for crop insurance in Brazil.

show abstract

Section: Brief Literature Reviewmentioning

confidence: 99%

Premium subsidies and crop insurance demand in Brazil

Lavorato

Lelis

Braga

2019

AFR

View full text Add to dashboard Cite

show abstract

“…The implication of this finding is that if premiums are too high, then adverse selection issues may be compounded and lead to a higher risk pool where the program may become unsustainable. In contrast, Woodard and Ying (2018) recently found that demand may be more elastic when accounting for the endogeneity associated with premium rate calculations and participation 2…”

Section: Literature Reviewmentioning

confidence: 95%

Who buys crop insurance? Predictors of the participation gap between organic and conventional farms

Belasco

Fuller

2021

Applied Eco Perspectives Pol

View full text Add to dashboard Cite

This study examines the participation gap in crop insurance between organic and conventional producers. To solicit input from producers of organic and diversified crop production systems, we developed a national survey through the Organic AgricultureResearch and Education Initiative (OREI) that resulted in over 1,000 valid responses, as well as data from the Agricultural Resource Management Survey (ARMS).Results suggest a high degree of correlation between crop insurance participation with respect to the degree of commercialization of a farm. Additionally, small and diversified operations report that the complexity and record keeping associated with crop insurance is often not worthwhile. This paper concludes with a discussion regarding future risk management education programs and how they can be better targeted by combining the use of crop insurance in conjunction with improved record keeping and a better understanding of loan requirements and documentation.

show abstract

“…Enrollees tend to assume larger risks which could increase the probability of loss associated with insured peril because the enrollee knows the insurance firm will definitely incur cost. Following Schlesinger (1985), Jack & Ormiston (1999), Tse (2009), Thogersen (2016), Woodard & Yi (2018) and Ogungbenle, et al (2020), the two types of payments payable by the insurance firm are (i) the payment per loss and (ii) payment per payment. The payment per loss random variable represents the losses over which payment is effected and losses on which payment is less than the agreed deductible.…”

Section: A Survey Of Casualty Preliminariesmentioning

confidence: 99%

Actuarial Technique of Modelling the Out of Pocket with Deductible and Stop Loss in Health Care Insurance

Michael

2021

Nep J. Math. Sci.

View full text Add to dashboard Cite

The paper is intended to numerically estimate health insurance out of pocket spending from the perspective of the enrollees in order to inform whether health insurance scheme pricing policy delivers value to the enrollees. We study the implications of financing health care insurance using a classification model for health care insurance under the framework of deductibles and stop loss. The paper is designed for health underwriting professionals, particularly those who consult for health insurance schemes. This is essential given the form and emergence of treating enrollees fairly, based on regulations that impact on actuarial consultants advising on health insurance scheme product lines. The objectives of this paper are to demonstrate actuarial methods for estimating (i) total health expenses (ii) out of pocket costs (iii) reimbursements by third party insurance. (iv) examine the actuarial implications of the chosen model. In computing the out of pocket and reimbursement, the Pitacco’s model was adopted because of its relatively computational superiority and the fact that both deductible and stop loss form its core parameters. Our results show that there is a positive relationship between total health expense and the share funded by out of pocket spending. As the health expenditure increases, the share funded by out of pocket progressively increases.

show abstract

Estimation of Insurance Deductible Demand Under Endogenous Premium Rates

Cited by 19 publications

References 40 publications

Premium subsidies and crop insurance demand in Brazil

Premium subsidies and crop insurance demand in Brazil

Who buys crop insurance? Predictors of the participation gap between organic and conventional farms

Actuarial Technique of Modelling the Out of Pocket with Deductible and Stop Loss in Health Care Insurance

Contact Info

Product

Resources

About