Livestock Revenue Insurance

Chad E. Hart, Bruce A. Babcock and Dermot Hayes

No 18356, Hebrew University of Jerusalem Archive from Hebrew University of Jerusalem

Abstract: This study outlines several possible structures for livestock revenue insurance. The policies take the form of an exotic optionan Asian basket option. The actuarially fair premiums for these policies are equal to the prices of the options they represent. Due to the complexity of pricing Asian basket options, we have combined two techniques for pricing options to reach the actuarially fair premiums. Projected premiums, producer welfare, and program efficiency are evaluated for the insurance products and existing market tools. Using efficiency ratios and certainty equivalent returns, we compare the insurance policies to strategies involving existing futures and options.

Keywords: Livestock Production/Industries; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 34
Date: 2000
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/18356/files/wp990224.pdf (application/pdf)

Related works:
Journal Article: Livestock Revenue Insurance (2001)
Working Paper: Livestock Revenue Insurance (2001)
Working Paper: Livestock Revenue Insurance (2001)
Working Paper: Livestock Revenue Insurance (2001)
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:hebarc:18356

DOI: 10.22004/ag.econ.18356

Access Statistics for this paper

More papers in Hebrew University of Jerusalem Archive from Hebrew University of Jerusalem
Bibliographic data for series maintained by AgEcon Search ().