The Budgetary and Producer Welfare Effects of Revenue Insurance

The efficiency of redistribution of a government provided revenue insurance program is compared with the 1990 farm program. The results indicate the revenue insurance would be more efficient because it would provide subsidies when and only when revenue is low and marginal utility is high, and it works on the component of the objective function (revenue) that is of greatest relevance to producers. Simulation results indicate that a revenue insurance scheme that guarantees 75 percent of expected revenue to risk-averse producers could provide approximately the same level of benefits as the 1990 program, at as little as one-fourth the cost.


Issue Date:
1997
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/18628
Total Pages:
25
Series Statement:
CARD Working Paper 97-WP 180




 Record created 2017-04-01, last modified 2017-04-04

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