Is There a Viable Market for Area-Based Crop Insurance?

Posted: 26 Jul 2007

See all articles by Xiaohui Deng

Xiaohui Deng

California State University, Fresno

Barry J. Barnett

University of Georgia - Department of Agricultural & Applied Economics

Dmitry V. Vedenov

University of Georgia - College of Agricultural and Environmental Sciences

Abstract

The performance of area yield insurance and farm-level multiple peril crop insurance is analyzed for cotton and soybean production in Georgia and South Carolina. The analysis improves on many previous studies by utilizing actual farm-level yield data and by comparing the two types of insurance products not only for actuarially fair premium rates but also for actual unsubsidized and subsidized premium rates. Results suggest that, even in heterogeneous production regions, area yield insurance may be a viable alternative to farm-level insurance when premium rates for farm-level insurance contain large positive wedges.

Suggested Citation

Deng, Xiaohui and Barnett, Barry J. and Vedenov, Dmitry V., Is There a Viable Market for Area-Based Crop Insurance?. American Journal of Agricultural Economics, Vol. 89, No. 2, pp. 508-519, May 2007. Available at SSRN: https://ssrn.com/abstract=1002739 or http://dx.doi.org/10.1111/j.1467-8276.2007.00975.x

Xiaohui Deng (Contact Author)

California State University, Fresno ( email )

5241 North Maple Avenue
Fresno, CA 93740
United States
(559) 278-4455 (Phone)

HOME PAGE: http://cast.csufresno.edu/agecon/faculty/Deng.htm

Barry J. Barnett

University of Georgia - Department of Agricultural & Applied Economics ( email )

Athens, GA 30602-7509
United States

Dmitry V. Vedenov

University of Georgia - College of Agricultural and Environmental Sciences ( email )

Athens, GA 30602
United States

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