RATE-MAKING FOR FARM-LEVEL CROP INSURANCE
Michael Reed () and
Jerry R. Skees
No 278643, 1985 Annual Meeting, August 4-7, Ames, Iowa from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)
This research identifies two problems in the new Federal Crop Insurance that may cause adverse selection: 1) the relationship between rate-making and expected yields for individual farmers, and 2) the bias introduced in coverage protection when trends are not used to establish ••• expected yields. A theoretical investigation using the normality assumption demonstrates the potential severity of these problems and empirical results from farm-level data lend further support.
Keywords: Crop Production/Industries; Farm Management (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea85:278643
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