Efficiency Costs of Subsidy Rules for Crop Insurance

H. Holly Wang, Steven D. Hanson and J. Roy Black

Journal of Agricultural and Resource Economics, 2003, vol. 28, issue 01, 22

Abstract: Participation in federal crop insurance programs has been encouraged through premium subsidies. The current subsidy depends on contract features as well as coverage levels. This type of subsidy rule causes farmers to choose contract designs and coverages that are not efficient for managing risk, in order to capture subsidy. Farmers are found to be as well off with a flat subsidy that is up to 25% less than the value of the current regressive proportional subsidy.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:jlaare:30717

DOI: 10.22004/ag.econ.30717

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