Does the Samaritan's Dilemma Matter? Evidence from U.S. Agriculture

60 Pages Posted: 21 Nov 2016

See all articles by Tatyana Deryugina

Tatyana Deryugina

University of Illinois

Barrett Kirwan

University of Illinois at Urbana-Champaign

Multiple version iconThere are 2 versions of this paper

Date Written: November 2016

Abstract

The Samaritan’s dilemma posits a downside to charity: recipients may rely on free aid instead of their own efforts. Anecdotally, the expectation of free assistance is thought to be important for decisions about insurance and risky behavior in numerous settings, but reliable empirical evidence is scarce. We estimate whether the Samaritan’s dilemma exists in U.S. agriculture, where both private crop insurance and frequent federal disaster assistance are present. We find that bailout expectations are qualitatively and quantitatively important for the insurance decision. Furthermore, aid expectations reduce both expenditure on farm inputs and subsequent crop revenue.

Suggested Citation

Deryugina, Tatyana and Kirwan, Barrett, Does the Samaritan's Dilemma Matter? Evidence from U.S. Agriculture (November 2016). NBER Working Paper No. w22845. Available at SSRN: https://ssrn.com/abstract=2873318

Tatyana Deryugina (Contact Author)

University of Illinois ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

HOME PAGE: http://deryugina.com

Barrett Kirwan

University of Illinois at Urbana-Champaign ( email )

601 E John St
Champaign, IL 61820
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
10
Abstract Views
208
PlumX Metrics