Information and Opportunistic Behavior in Federal Crop Insurance Programs

Cory Walters (), C. Shumway, Hayley Chouinard () and Philip Wandschneider ()

No 2008-9, Working Papers from School of Economic Sciences, Washington State University

Abstract: Opportunistic behavior in crop insurance can arise due to asymmetric information between producers and the Federal Crop Insurance Corporation. Producers who insure fields using transitional yields based on county average yields or who select options such as buy-up coverage or revenue insurance may increase their return from crop insurance. Using field-level crop insurance contract data for several crops in five growing regions, we find evidence that producers can profit from using buy-up coverage, revenue insurance, and transitional yields and that the level of producer opportunism is crop but not necessarily land-quality specific and is greater due to premium subsidization.

Keywords: opportunistic behavior; crop insurance; buy-up; revenue; transitional yields (search for similar items in EconPapers)
JEL-codes: Q18 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2008-08
New Economics Papers: this item is included in nep-agr and nep-ias
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Citations: View citations in EconPapers (2)

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