RELIABILITY OF OPTIONS MARKETS FOR CROP REVENUE INSURANCE RATING

David E. Buschena and Lee Ziegler

Journal of Agricultural and Resource Economics, 1999, vol. 24, issue 2, 26

Abstract: Revenue insurance, only recently introduced for major crops in the U.S., has captured a considerable share of the multiple-peril insurance market. This study evaluates the predictive reliability of using price distributions inferred from options markets to rate revenue insurance products. We find for periods early in the crop growing season that price distributions inferred from options trades offer greater reliability than distributions based on historical futures trades. Options-based price distributions should receive further consideration in crop revenue insurance rating, but current administrative constraints must be considered.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:ags:jlaare:30806

DOI: 10.22004/ag.econ.30806

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