Does The Samaritan's Dilemma Matter? Evidence From U.S. Agriculture

Tatyana Deryugina and Barrett Kirwan

No 22845, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The Samaritan’s dilemma posits a downside to charity: recipients may rely on free aid instead of their own efforts. Anecdotally, the expectation of free assistance is thought to be important for decisions about insurance and risky behavior in numerous settings, but reliable empirical evidence is scarce. We estimate whether the Samaritan’s dilemma exists in U.S. agriculture, where both private crop insurance and frequent federal disaster assistance are present. We find that bailout expectations are qualitatively and quantitatively important for the insurance decision. Furthermore, aid expectations reduce both expenditure on farm inputs and subsequent crop revenue.

JEL-codes: D72 H84 Q18 (search for similar items in EconPapers)
Date: 2016-11
Note: EEE PE
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Citations: View citations in EconPapers (11)

Published as Tatyana Deryugina & Barrett Kirwan, 2018. "DOES THE SAMARITAN'S DILEMMA MATTER? EVIDENCE FROM U.S. AGRICULTURE," Economic Inquiry, vol 56(2), pages 983-1006.

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Journal Article: DOES THE SAMARITAN'S DILEMMA MATTER? EVIDENCE FROM U.S. AGRICULTURE (2018)
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