General Equilibrium Modelling of the Insurance Industry: U.S. Crop Insurance

Alexandre Gohin ()
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Alexandre Gohin: SMART-LERECO - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST

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Abstract: The U.S. farm policy has progressively changed in recent years, with greater reliance on subsidized crop insurance programs in the place of fixed direct payments. Despite the use of such insurance over a long period of time, quantitative macroeconomic assessments of insurance programs are lacking. We develop an original stochastic computable general equilibrium framework where we isolate the coverage effects provided by subsidized insurance programs. We find that their welfare effects are dramatically modified once we recognize their risk sharing properties. Our simulated market effects on the U.S. cereal markets are consistent with currently available microeconometric evidence.

Keywords: Crop Insurance; U.S. Farm Policy; Markets; Welfare (search for similar items in EconPapers)
Date: 2019-12-30
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Citations: View citations in EconPapers (2)

Published in Journal of Global Economic Analysis, 2019, 4 (2), pp.108-145. ⟨10.21642/JGEA.040203AF⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02911590

DOI: 10.21642/JGEA.040203AF

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