Neoclassical Approach to Traditional Business Insurance – Introduction to the Theory  of Agricultural Insurance

Kulawik, Jacek

doi:10.30858/zer/89614

Cited by 3 publications

(11 citation statements)

References 7 publications

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“…Based on Dhami (2016), the general assumptions of the EUT in the von Naumann-Morgenstern (VNM) convention are presented below (Kulawik, 2018).…”

Section: Axioms and Representationmentioning

confidence: 99%

“…Korzystając z pracy Dhamiego (2016), poniżej przedstawiono ogólne założenia EUT w konwencji von Naumanna-Morgensterna (VNM) (Kulawik, 2018).…”

Section: Aksjomaty I Reprezentacjaunclassified

“…As can be seen, the agent strives to maximize the weighted expected utility, where the weights are probabilities. It should also be clarified that, by convention, the agent is assumed to be risk averse, so the utility function is concave (Kulawik, 2018). Furthermore, it means that they may be more likely to purchase insurance cover than a risk taker or a risk neutral person.…”

Section: Przykłady Zastosowania Eut I Pt W Modelowaniu Decyzji Ubezpi...mentioning

confidence: 99%

“…The premium charged is then actuarially fair, which is expressed in the following formula: Jak widać, agent dąży do maksymalizacji ważonej użyteczności oczekiwanej, gdzie wagami są prawdopodobieństwa π s . Trzeba jeszcze wyjaśnić, że zgodnie z dominującą konwencją założono, iż agent cechuje się awersją do ryzyka, a więc jego funkcja użyteczności jest wklęsła (Kulawik, 2018). Oznacza to dalej, że bardziej może być on skłonny nabyć ochronę ubezpieczeniową niż ryzykant albo osoba neutralnie nastawiona do ryzyka.…”

Section: Przykłady Zastosowania Eut I Pt W Modelowaniu Decyzji Ubezpi...unclassified

“…The agent's decision problem now comes down to choosing the z parameter to maximize utility (Kulawik, 2018):…”

Section: Przykłady Zastosowania Eut I Pt W Modelowaniu Decyzji Ubezpi...mentioning

confidence: 99%

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Expected Utility and Prospect Theories Versus Agricultural Insurance

Kulawik¹

2023

Zagadnienia Ekonomiki Rolnej / Problems of Agricultural Economi

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The expected utility theory/hypothesis (EUT/ET) by von Neumann and Morgenstern has become the subject of criticism and efforts to improve it already at the moment of presenting its complete axiomatic form (1953). The broadest analysis was carried out by Kahneman and Tversky using the prospect theory (PT). However, it was not carefully prepared. The above two were helped in 1982 by Quiggin with his extension of the EUT in the form of the rank-dependent expected utility (RDEU). This was followed by Kahneman and Tversky in 1992 boasted the second version of the prospect theory, i.e., the cumulative prospect theory (CPT). It became the most competitive proposal to the EUT, although later other researchers added new elements to it. In this way, the subsequent generations of the PT were created. Today there are five in total. It soon became apparent that the PT also did not satisfactorily explain various cases of decision-making under conditions of risk and uncertainty. Upon closer analysis, however, it turned out that the PT was in fact a generalization of the EUT. Both theories are tools for modeling insurance decisions, including agriculture. In this context, the main aim of the article is to present the principles and the results of applying them in agricultural insurance. The analysis shows that the pragmatic solution at present is the combined use of both theories, with the EUT usually being the reference point.

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“…Based on Dhami (2016), the general assumptions of the EUT in the von Naumann-Morgenstern (VNM) convention are presented below (Kulawik, 2018).…”

Section: Axioms and Representationmentioning

confidence: 99%

“…Korzystając z pracy Dhamiego (2016), poniżej przedstawiono ogólne założenia EUT w konwencji von Naumanna-Morgensterna (VNM) (Kulawik, 2018).…”

Section: Aksjomaty I Reprezentacjaunclassified

Section: Przykłady Zastosowania Eut I Pt W Modelowaniu Decyzji Ubezpi...mentioning

confidence: 99%

Section: Przykłady Zastosowania Eut I Pt W Modelowaniu Decyzji Ubezpi...unclassified

“…The agent's decision problem now comes down to choosing the z parameter to maximize utility (Kulawik, 2018):…”

Section: Przykłady Zastosowania Eut I Pt W Modelowaniu Decyzji Ubezpi...mentioning

confidence: 99%

See 3 more Smart Citations

Expected Utility and Prospect Theories Versus Agricultural Insurance

Kulawik¹

2023

Zagadnienia Ekonomiki Rolnej / Problems of Agricultural Economi

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Property Insurance in Agriculture on the Example of Dobrcz Commune

Zawisza

Kasprowicz

2018

Annals PAAAE

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The purpose of the study was an analysis of non-life insurance in agriculture on the example of the Dobrcz municipality. The studies were performed in March 2017. 40 randomly selected people participated in the study. Buying up compulsory and voluntary insurance has been analyzed. The purpose of executed study was also to show the most frequently chosen insurance companies and their offer. The study allowed to diagnose the level of farmers’ satisfaction with chosen insurance. Compulsory and voluntary non-life insurance bring with them certain advantages. It’s seen by farmers, who increasingly buy voluntary insurance in addiction to compulsory insurance. This was also the case in the studied municipality in which compulsory insurance is used by 100% of participants, whereas voluntary insurance by 40%. Awareness of insurance using farmers is increasing, because they know, that in case of the occurrence of an undesirable occurrence, they have certain backup and source of cash. This in turn is associated with the satisfaction of participants with the services of insurance companies.

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Demand for Aquaculture Insurance and Barriers’ Effects Among Fish Farmers in Lagos, Nigeria

JIMOH,

AJEMUNIGBOHUN

2023

GUJEDS

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Boosting aquaculture insurance, as a financial instrument, can assist the sustenance of aquatic food demand in order to cushion fish farmers’ income, and ensure adequate farm property safety in Nigeria. This study examined the barriers affecting aquaculture insurance and its related demand determinants, with empirical evidence drawn from fish farmers in Lagos State. The study employed a survey approach cum multiphase sampling technique. A descriptive statistic and Friedman’s rank test were adopted in the data analysis. This study contributes immensely with the tabular and graphical models that explain the barriers affecting aquaculture insurance and demand determinants for aquaculture insurance in Lagos State, Nigeria. While a major barrier, from the findings, to demand for aquaculture insurance was recorded due to high cost of insurance premium, poor access to the policy, and the likes; low awareness, poor insurance regulation, poor claims settlement and low financial literacy, among fish farmers, were recorded for demand determinants for aquaculture insurance. The study recommended that aquaculture underwriters should enhance and expand their value-chain processes in a bid to bolster fish farmers’ production capacities. However, the government should expand the subsidy net for more fish farmers to have access. With the simplicity of insurance contract design, aquaculture underwriters will gain attraction from farmers, which will, in turn, generate improved premium and their potential profitability.

show abstract

Neoclassical Approach to Traditional Business Insurance – Introduction to the Theory of Agricultural Insurance

Cited by 3 publications

References 7 publications

Expected Utility and Prospect Theories Versus Agricultural Insurance

Expected Utility and Prospect Theories Versus Agricultural Insurance

Property Insurance in Agriculture on the Example of Dobrcz Commune

Demand for Aquaculture Insurance and Barriers’ Effects Among Fish Farmers in Lagos, Nigeria

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