THE CROP INSURANCE DECISION: LENDERS AND PRODUCERS PREFERENCES

David J. Leathan, James W. Richardson and Bruce McCarl

No 278115, 1986 Annual Meeting, July 27-30, Reno, Nevada from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The effect of the producer's choice of crop insurance was evaluated at both the producer and lender performance levels. Whole-farm, Monte Carlo simulations for Texas wheat/sorghum operations were completed over a six year period beginning in 1985. Results indicate crop insurance would be preferred by moderately risk averse producers when the probability of firm failure was positive or the insurance loss ratio approached one. A lender preferred the use of crop insurance whenever the probability of firm bankruptcy was nonzero and was indifferent otherwise.

Keywords: Agricultural and Food Policy; Crop Production/Industries (search for similar items in EconPapers)
Pages: 20
Date: 1986-07
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea86:278115

DOI: 10.22004/ag.econ.278115

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