Area Yield Crop Insurance: Effectiveness of an Australian simulation

Jan Alexander Kazimierz Orlowski

No 167122, 2014 Conference (58th), February 4-7, 2014, Port Macquarie, Australia from Australian Agricultural and Resource Economics Society

Abstract: Area Yield Insurance (AYI) differentiates itself from the other more popular yield insurance schemes in its ability to reduce administrative costs, and decrease both adverse selection and moral hazard. These basic characteristics make AYI a candidate for considering a yield insurance scheme within Australia. This study simulates AYI indemnities and premium rates for five shires separated into two groups, based on geographical location. Through a set of coverage levels and farm yield variability, risk reduction and certainty equivalent measures are found. Adequacy of these measures are addressed though sensitivity analysis across a wide range of variables. Basis risk issues are confronted and brought to the forefront through correlation analysis of both acrossHshire and farmHshire yields. Results provide positive notions towards effectiveness in yield protection for Australian producers, however under the immobilizing assumption of government or external support.

Keywords: Agricultural Finance; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 70
Date: 2014-02
New Economics Papers: this item is included in nep-agr and nep-ias
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/167122/files/Orlowski2014.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aare14:167122

DOI: 10.22004/ag.econ.167122

Access Statistics for this paper

More papers in 2014 Conference (58th), February 4-7, 2014, Port Macquarie, Australia from Australian Agricultural and Resource Economics Society Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().