Modelling farmer participation to a revenue insurance scheme by the means of the Positive Mathematical Programming

Raffaele Cortignani and Simone Severini
Additional contact information
Raffaele Cortignani: DAFNE, University of Tuscia, Viterbo, Italy
Simone Severini: DAFNE, University of Tuscia, Viterbo, Italy

Agricultural Economics, 2012, vol. 58, issue 7, 324-331

Abstract: European farmers face an increasing income uncertainty. The debate is growing on the role of the insurance schemes and on the support provided by the CAP in this field. Therefore, there is a need for the empirical analysis and the tools aimed at providing empirical evidences on this subject. This paper develops an innovative Positive Mathematical Programming model that takes into explicit consideration the risk aversion behaviour. This is used to investigate the implications of participating in the crop revenue insurance scheme. In particular, a quadratic mix integer program has been developed on a small group of crop farms in Italy and it has been used to simulate the impact of changes in the level of the insurance premium. The objective of this paper is to assess the soundness of the proposed approach and to identify its limitations. The obtained results suggest that this could be a useful tool to investigate the impact of participating in insurance schemes on production patterns, farm profitability and the role of public support.

Keywords: insurance schemes; PMP; farmers' participation; risk aversion; non-linear mix-integer programming (search for similar items in EconPapers)
Date: 2012
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://agricecon.agriculturejournals.cz/doi/10.17221/127/2011-AGRICECON.html (text/html)
http://agricecon.agriculturejournals.cz/doi/10.17221/127/2011-AGRICECON.pdf (application/pdf)
free of charge

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:58:y:2012:i:7:id:127-2011-agricecon

DOI: 10.17221/127/2011-AGRICECON

Access Statistics for this article

Agricultural Economics is currently edited by Ing. Zdeňka Náglová, Ph.D.

More articles in Agricultural Economics from Czech Academy of Agricultural Sciences
Bibliographic data for series maintained by Ivo Andrle ().