On the Revelation of Private Information in the U.S. Crop Insurance Program

16 Pages Posted: 18 Nov 2007

See all articles by A. Tolga Ergun

A. Tolga Ergun

State Street Corporate

Alan P. Ker

University of Arizona - Department of Agricultural and Resource Economics

Abstract

The crop insurance program is a prominent facet of U.S. farm policy. The participation of private insurance companies as intermediaries is justified on the basis of efficiency gains. These gains may arise from either decreased transaction costs through better established delivery channels and/or the revelation of private information. We find empirical evidence suggesting that private information is revealed by insurance companies via their reinsurance decisions. However, it is unlikely that such information will be incorporated into subsequent premium rates by the government.

Suggested Citation

Ergun, A. Tolga and Ker, Alan P., On the Revelation of Private Information in the U.S. Crop Insurance Program. Journal of Risk & Insurance, Vol. 74, No. 4, pp. 761-776, December 2007. Available at SSRN: https://ssrn.com/abstract=1030864 or http://dx.doi.org/10.1111/j.1539-6975.2007.00233.x

A. Tolga Ergun

State Street Corporate ( email )

1 Lincoln Street
Boston, MA 02111
United States

Alan P. Ker (Contact Author)

University of Arizona - Department of Agricultural and Resource Economics ( email )

1110 E. North Campus Drive
Tucson, AZ 85721-0023
United States
(520) 621-6265 (Phone)

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