Revisiting the demand of agricultural insurance: The case of Spain

Alberto Garrido and David Zilberman

No 9266, 101st Seminar, July 5-6, 2007, Berlin Germany from European Association of Agricultural Economists

Abstract: We use the actual insurance records of 52,300 farmers and 11 years to estimate two sets of insurance demands. We define measures of insurance's expected returns, variance and third moment, based on observed insurance data, and infer the expected returns for those farmers that have never had an indemnity. We estimate several probit models and count models for the insuring vs non-insuring strategies, in which the economic returns of insurance and its two measures of dispersion enter as explanatory variables. Results show that farmers' insurance strategies are largely explained by their actual insurance experience as captured by these three variables. Individuals with loss rations greater than 1 do not show more responsiveness that those facing more balanced premium charges. Results show that adverse selection may not be a major source of inefficiency in the Spanish insurance system.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Pages: 26
Date: 2007
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Citations: View citations in EconPapers (5)

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Journal Article: Revisiting the demand for agricultural insurance: the case of Spain (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa101:9266

DOI: 10.22004/ag.econ.9266

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