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Author: Christopher Joonhee Rue
Publisher:
ISBN: 9781109662955
Category :
Languages : en
Pages :
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Book Description
Agricultural risk is a particularly damaging problem for farmers in developing countries who do not have access to financial safety nets or the assets to withstand severe crop failure. Because multi-peril individualized crop insurance is plagued with costly informational problems, much attention has been paid to index-based insurance as a tool to mitigate risk. However, several recent experiences with index insurance products in developing countries have had lower-than-expected participation. In this thesis, I revisit the microeconomic framework upon which area yield insurance, a common type of index insurance, is based. I relax key assumptions on loading costs and the presence of informal risk sharing arrangements (IRSA's) that guarantee a consumption minimum. In adding elements of realism to the model, I find that predictions for demand are very sensitive to household characteristics like risk preferences and wealth, and that overall demand predictions are lower than under the prevoius, more restrictive assumptions. Further, institutional characteristics like the presence of subsidies or the strength of IRSA's have the potential to severely impact demand for index insurance. The context for the empirical analysis is the Lambayeque valley in the north coast of Peru, where policymakers in the region are considering expanding an infant index insurance market. Under the original, simplified assumptions, 86.5% of farmers in the valley would demand an area yield insurance contract. However, demand falls when introducing loading and IRSA's, and demand predictions are sensitive to the level of risk aversion, wealth, the strengh of the IRSA's and the presence of subsidies. My findings suggest that, in the research context, comprehensive information on household and institutional characteristics are key in performing quality ex-ante demand analyses of index insurance.
Author: Christopher Joonhee Rue
Publisher:
ISBN: 9781109662955
Category :
Languages : en
Pages :
Get Book Here
Book Description
Agricultural risk is a particularly damaging problem for farmers in developing countries who do not have access to financial safety nets or the assets to withstand severe crop failure. Because multi-peril individualized crop insurance is plagued with costly informational problems, much attention has been paid to index-based insurance as a tool to mitigate risk. However, several recent experiences with index insurance products in developing countries have had lower-than-expected participation. In this thesis, I revisit the microeconomic framework upon which area yield insurance, a common type of index insurance, is based. I relax key assumptions on loading costs and the presence of informal risk sharing arrangements (IRSA's) that guarantee a consumption minimum. In adding elements of realism to the model, I find that predictions for demand are very sensitive to household characteristics like risk preferences and wealth, and that overall demand predictions are lower than under the prevoius, more restrictive assumptions. Further, institutional characteristics like the presence of subsidies or the strength of IRSA's have the potential to severely impact demand for index insurance. The context for the empirical analysis is the Lambayeque valley in the north coast of Peru, where policymakers in the region are considering expanding an infant index insurance market. Under the original, simplified assumptions, 86.5% of farmers in the valley would demand an area yield insurance contract. However, demand falls when introducing loading and IRSA's, and demand predictions are sensitive to the level of risk aversion, wealth, the strengh of the IRSA's and the presence of subsidies. My findings suggest that, in the research context, comprehensive information on household and institutional characteristics are key in performing quality ex-ante demand analyses of index insurance.
Author: Jean-Marc Bourgeon
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
The implementability of area-yield insurance contracts in the presence of symmetric and asymmetric information about the farmer's "beta" linking his yield to the risk-pool's yield is examined. In the presence of fixed costs and symmetric information result that optimality requires setting the slope of the indemnity schedule equal to each farmer's beta is confirmed. When there is asymmetric information between the insurer and the farmer, however, this full-insurance contract is vulnerable to adverse selection, and therefore may not be implementable for general cost structures. The optimal area-yield insurance contract under asymmetric information is characterized.
Author: Olivier Mahul
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This article considers the problem of the optimal design of crop insurance when the indemnity is based upon the aggregate yield of a surrounding area. The optimal area yield crop insurance contract depends on the individual beta coefficient which measures the sensitivity of farm yield to area yield. Indemnity payments are made whenever the realized area yield is lower (higher) than a critical yield if the beta coefficient is positive (negative). The optimal contract contains a “disappearing deductible” if the beta coefficient is higher than unity.
Author: Dean Arthur Dittus
Publisher:
ISBN: 9781109818871
Category : Corn
Languages : en
Pages : 53
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Book Description
In an attempt to reduce adverse selection, moral hazard, and administrative costs the Risk Management Agency (RMA) developed area yield crop insurance products. Area yield products require RMA to accurately predict county average yields two years in advance. Using data from 105 Kansas counties for four major crops, this study evaluates four yield trending models (linear time trend, precipitation adjusted time trend, Olympic and simple average) combined with three extrapolation techniques to identify the best out-of-sample estimation model based on the lowest out-of-sample error alone. The optimal number of years of historical data (N) to use in the models was also considered. Contrary to logical assumption, a lower value of N performed better for corn, grain sorghum, and soybeans. In general, the precipitation adjusted model out performed the linear time trend. The Olympic average model performed surprisingly well, indicating that a method of eliminating outliers may provide superior results.
Author: Olivier Mahul
Publisher: World Bank Publications
ISBN: 0821382195
Category : Business & Economics
Languages : en
Pages : 250
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Book Description
Governments in developing countries have been increasingly involved in the support of agricultural (crop and livestock) insurance programs in recent years. In their attempts to design and implement agricultural insurance, they have sought technical and financial assistance from the international community and particularly from the World Bank. One of the recurrent requests from governments regards international experience with agricultural insurance, not only in developed countries, where in some cases agricultural insurance has been offered for more than a century, but also in middleand low-income countries. Governments are particularly interested in the technical, operational, financial, and institutional aspects of public support to agricultural insurance. 'Government Support to Agricultural Insurance' informs public and private decision makers involved in agricultural insurance about recent developments, with a particular focus on middle- and low-income countries. It presents an updated picture of the spectrum of institutional frameworks and experiences with agricultural insurance, ranging from countries in which the public sector provides no support to those in which governments heavily subsidize agricultural insurance. This analysis is based on a survey conducted by the World Bank s agricultural insurance team in 2008 in 65 developed and developing countries. Drawing on the survey results, the book identifies some key roles governments can play to support the development of sustainable, affordable, and cost-effective agricultural insurance programs.
Author: Andy Clark
Publisher: DIANE Publishing
ISBN: 1437903797
Category : Technology & Engineering
Languages : en
Pages : 248
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Book Description
Cover crops slow erosion, improve soil, smother weeds, enhance nutrient and moisture availability, help control many pests and bring a host of other benefits to your farm. At the same time, they can reduce costs, increase profits and even create new sources of income. You¿ll reap dividends on your cover crop investments for years, since their benefits accumulate over the long term. This book will help you find which ones are right for you. Captures farmer and other research results from the past ten years. The authors verified the info. from the 2nd ed., added new results and updated farmer profiles and research data, and added 2 chap. Includes maps and charts, detailed narratives about individual cover crop species, and chap. about aspects of cover cropping.
Author: Rao, Prakash
Publisher: IGI Global
ISBN: 1522510478
Category : Science
Languages : en
Pages : 449
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Book Description
Changes in the planet’s climate in recent years have led to significant impacts on natural resources and ecosystems. New strategies must be adopted in order to support the protection and continued development of numerous natural resources. Reconsidering the Impact of Climate Change on Global Water Supply, Use, and Management is a pivotal reference source for the latest scholarly material on the relationship between global climate changes and the planet’s water ecosystems. Highlighting relevant environmental, social, and economic issues, this book is ideally designed for academics, researchers, policy makers, students, and practitioners interested in the impacts of climate change on global water resources.
Author: Chad Hart
Publisher:
ISBN:
Category : Agriculture and state
Languages : en
Pages : 20
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Book Description
Author: Mr.Jaromir Benes
Publisher: International Monetary Fund
ISBN: 1475505523
Category : Business & Economics
Languages : en
Pages : 71
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Book Description
At the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving Fisher (1936) claimed the following advantages for this plan: (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation. We study these claims by embedding a comprehensive and carefully calibrated model of the banking system in a DSGE model of the U.S. economy. We find support for all four of Fisher's claims. Furthermore, output gains approach 10 percent, and steady state inflation can drop to zero without posing problems for the conduct of monetary policy.
Author:
Publisher:
ISBN:
Category : Agricultural insurance
Languages : en
Pages :
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Book Description
