CROP INSURANCE VALUATION UNDER ALTERNATIVE YIELD DISTRIBUTIONS

Considerable disagreement exists about the most appropriate characterization of farm-level yield distributions. Yet, the economic importance of alternate yield distribution specifications on insurance valuation, product designs and farm-level risk management has not been investigated or documented. The results of this study demonstrate that large differences in expected payments from popular crop insurance products can arise solely from the parameterization chosen to represent yields. The results suggest that the frequently unexamined yield distribution specification may lead to incorrect conclusions in important areas of insurance and risk management research such as policy rating, and assessment of expected payments from policies.


Issue Date:
2001
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/18953
Total Pages:
39
Series Statement:
2001 Conference, St. Louis, MO, April 23-24, 2001




 Record created 2017-04-01, last modified 2017-10-15

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