Anything left for animal disease insurance? A choiceexperiment approach

Jaakko Heikkilä (), Jarkko K. Niemi, Katriina Heinola, Eero Liski and Sami Myyrä
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Jaakko Heikkilä: Economics and Society, Natural Resources Institute Finland (Luke),Latokartanonkaari 9, Helsinki FI-00790, Finland
Jarkko K. Niemi: Economics and Society, Natural Resources Institute Finland (Luke),Latokartanonkaari 9, Helsinki FI-00790, Finland et Economics and Society, Natural Resources Institute Finland (Luke),Kampusranta 9, FI-60320 Seinäjoki, Finland
Katriina Heinola: Economics and Society, Natural Resources Institute Finland (Luke),Latokartanonkaari 9, Helsinki FI-00790, Finland
Eero Liski: Economics and Society, Natural Resources Institute Finland (Luke),Latokartanonkaari 9, Helsinki FI-00790, Finland

Review of Agricultural, Food and Environmental Studies, 2016, vol. 97, issue 4, 237-249

Abstract: Animal disease insurance plays only a minor role inpublic activities related to animal diseases in animal produc-tion in Europe, and the current situation is likely to persist aslong as producers place strong faith on public compensationschemes. In this study, we undertook a farm survey in Finlandemploying a choice experiment to study the willingness to payfor animal disease insurance products. We found that pro-ducers’willingness to pay for animal disease insurance isrelatively low, even if consequential losses are covered.However, attributes of the insurance products which increasedthe likelihood of the producer wishing to purchase the productin a statistically significant manner were identified. The mostimportant attribute was a low deductible. Using latent classanalysis, four classes of producers were identified, those whowere (1) not interested, (2) weakly interested or (3) stronglyinterested in insurance, and additionally, (4) a group whoemphasised biosecurity measures but was not willing to pur-chase insurance. Those primarily interested in insurance weretypically young, well-educated producers from large farms,and they already had a good level of biosecurity on theirfarms. However, the majority of the respondents preferrednot to purchase insurance. The analysis suggests that commer-cial production animal disease insurance may need to besubsidised or otherwise made more attractive to producers,and even so, many producers might consider it unnecessary.

Keywords: Insurance.Animal; disease.Choice; experiment.Questionnaire.Latent; class (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:rae:jouraf:v:97:y:2016:i:4:p:237-249

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