Open AccessPosted Content
Can Crop Insurance Premiums be Reliably Estimated
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TLDR
In this article, the accuracy of crop insurance rating methods based on historical liability and indemnity data (similar to the procedure currently used by the Risk Management Agency) and yield distribution approaches are compared to "true" rates using empirically-grounded simulation procedures that take into account common data availability constraints.Citations
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A Flexible Parametric Family for the Modeling and Simulation of Yield Distributions
TL;DR: This article introduced a system of distributions that can span the entire mean-variance-skewness-kurtosis (MVSK) space and assesses its potential to serve as a more comprehensive parametric crop yield model, improving the breadth of distributional choices available to researchers.
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Impacts of Weather and Time Horizon Selection on Crop Insurance Ratemaking: A Conditional Distribution Approach
TL;DR: In this paper, a conditional Weibull distribution approach is developed that explicitly models the interaction of weather, technology, and other variables on probabilistic yield outcomes to address the issue.
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Soil Matters: How the Federal Crop Insurance Program should be reformed to encourage low-risk farming methods with high-reward environmental outcomes
TL;DR: In this article, the authors proposed a federal crop insurance pilot program that reduces premium rates for farmers who lower their risk of crop loss by investing in technically sound management practices that both reduce the risk of loss in the near-term and build soil health and increase productive capacity in the long-term.
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Crop Insurance Savings Accounts: A Viable Alternative to Crop Insurance?
TL;DR: In this paper, the viability of an alternative design for crop insurance based upon farmer-owned savings accounts that are regulated, monitored, and marginally assisted by the government is explored, and the proposed design eliminates the premium rating difficulties that weaken actuarial soundness and trigger the need for substantial external subsidies.
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A Probabilistic Model of Crop Insurance Purchase Decision
TL;DR: In this article, a probabilistic model of the individual crop insurance purchase decision is proposed, which explicitly recognizes that neither the producer nor the insurer knows the exact value of the actuarially fair premium (AFP) underlying the desired policy.
References
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Managing Risk in Farming: Concepts, Research, and Analysis
TL;DR: The authors provides a rigorous, yet accessible, description of risk and risk management tools and strategies at the farm level and provides never-before-published data on farmers' assessments of the risks they face, their use of alternative risk management strategies, and the changes they would make if faced with financial difficulty.
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Crop Insurance Reconsidered
TL;DR: In the late 1980s and early 1990s, there was much debate over how to fix what were perceived as the failures of the Federal Crop Insurance Improvement Act of 1980 as mentioned in this paper.
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The Conditional Beta Distribution as a Stochastic Production Function
Carl H. Nelson,Paul V. Preckel +1 more
TL;DR: In this article, the conditional beta distribution is proposed as a parametric model of the probability distribution of agricultural output and a two-stage maximum likelihood estimation procedure is shown to produce consistent, asymptotically efficient and normal estimates of maximum output and the parameters of the conditional distribution.
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Rate Making for Farm-Level Crop Insurance: Implications for Adverse Selection
Jerry R. Skees,Michael R. Reed +1 more
TL;DR: In this paper, the authors identify two problems in the new Federal Crop Insurance that may cause adverse selection: (a) the relationship between rate making and expected yields for individual farmers, and (b) the bias introduced in coverage protection when trends are not used to establish expected yields.