Optimal Coverage Level Choice with Individual and Area Plans of Insurance

We theoretically examine a farmer’s coverage demand with area and individual insurance plans as either separate or integrated options. The individual and area losses are assumed to be imperfectly and positively correlated. With actuarially fair rates, the farmer will fully insure with the individual plan and demand no area insurance regardless of the plans being separate or integrated. Under separate plans, free area insurance and the fair rate for individual insurance, area insurance replaces a portion of individual insurance demand. Under integrated plans, free area insurance, and the fair rate for individual insurance, the farmer over-insures using both area and individual plans.

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Year of publication:	2011-01-14
Authors:	Bulut, Harun ; Collins, Keith J. ; Zacharias, Thomas P.
Subject:	Agricultural risk \| area plans of insurance \| crop insurance \| Agribusiness \| Agricultural and Food Policy \| Agricultural Finance \| Crop Production/Industries \| Demand and Price Analysis \| Farm Management \| Research Methods/ Statistical Methods \| Risk and Uncertainty

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Type of publication:	Other
Language:	English
Notes:	Southern Agricultural Economics Association>2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas Selected Paper
Source:	BASE

Persistent link: https://ebvufind01.dmz1.zbw.eu/10009444562