Does subsidized MPCI crowds out traditional market-based hail insurance in the Netherlands?

Marcel van Asseldonk, Harold van der Meulen, Ruud van der Meer, Huib Silvis and Petra Berkhout

Agricultural Finance Review, 2018, vol. 78, issue 2, 262-274

Abstract: Purpose - The purpose of this paper is to determine which factors influence the choice to adopt subsidized multi-peril crop insurance (MPCI) in the Netherlands and whether prior hail insurance uptake is one of the determinants of MPCI adoption. In addition, it is analyzed whether subsidized MPCI has reduced disaster relief spending. Design/methodology/approach - Cross-sectional survey with 512 respondents using a stratified design comprising MPCI adopters and non-adopters sampled from the Dutch national census data base. The national census, including information on subsidized MPCI adoption from 2010 up to and including 2015, was supplemented with information on (prior) traditional market-based hail insurance uptake, and other underlying determining factors were elicited. Logistic regression analysis was used to determine which factors influence the choice to adopt MPCI. Findings - Analysis of MPCI adoption reveals that subsidized MPCI mainly substituted for market-based hail insurance uptake up to now. Growers who did not insure against hail in the past were hardly reached. Approximately, three-quarter of MPCI adopters insured hail prior to market introduction of MPCI. In the arable sector, MPCI adoption was 2.89 (p

Keywords: Subsidy; Adoption; Hail insurance; Multi-peril crop insurance (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eme:afrpps:afr-06-2017-0052

DOI: 10.1108/AFR-06-2017-0052

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