EX POST MORAL HAZARD IN CROP INSURANCE: COSTLY STATE VERIFICATION OR FALSIFICATION?
No 19650, 2002 Annual meeting, July 28-31, Long Beach, CA from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)
This article examines the extent to which actual crop insurance indemnification behavior conforms to the theoretical predictions of two ex post moral hazard models costly state verification and costly state falsification. A nonparametric regression technique is used to estimate the crop insurance indemnification profile for non-irrigated cotton in Texas. The results suggest that indemnification behavior in crop insurance is more in line with the costly state falsification paradigm. Thus, crop insurers seem to indemnify based on the assumption that it is not easy to verify actual ex post loss magnitude and eliminate the asymmetric information held by the insured farmers.
Keywords: Risk and Uncertainty (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
Journal Article: Ex post Moral Hazard in Crop Insurance: Costly State Verification or Falsification? (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:ags:aaea02:19650
Access Statistics for this paper
More papers in 2002 Annual meeting, July 28-31, Long Beach, CA from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) Contact information at EDIRC.
Series data maintained by AgEcon Search ().