Estimation of Crop Yields and Insurance Premiums Using a Shrinkage Estimator
Sebastain Awondo (),
Gauri S. Datta,
Gregory Colson and
Esendugue G. Fonsah
North American Actuarial Journal, 2018, vol. 22, issue 2, 289-308
We explore the estimation of crop yields and insurance premiums using a hierarchical Bayes small area estimator. The estimator is evaluated for Area Yield Production (AYP) policy using quasi-simulated corn yields in the United States. Its performance in producing reliable mean county yield and premium estimates is compared to that of a naive estimator. We also investigate the impact of these efficiency improvements on the residual losses between a farm-level policy and AYP. The proposed estimator is found to be substantially more efficient and less biased than the naive estimator.
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Persistent link: https://EconPapers.repec.org/RePEc:taf:uaajxx:v:22:y:2018:i:2:p:289-308
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