How Australian Farmers Deal With Risk

Amy Khuu and Ernst Weber ()
Additional contact information
Amy Khuu: Business School, University of Western Australia

No 12-07, Economics Discussion / Working Papers from The University of Western Australia, Department of Economics

Abstract: Farm survey data show that the risk aversion of West Australian farmers is comparable to that of other asset holders. An increase in the variability of crop yield by 20%, which may be caused by future climate change, would raise their willingness to pay for crop insurance almost one-to-one by 19%. West Australian farmers can insure against hail, fire and some other perils but not against the greatest risk – drought. The farm survey indicates that adverse selection does not arise in the existing market for crop insurance because insurance premiums reflect the risk of crop failure. However, a future supplier of drought insurance must take into consideration that drought insurance might give rise to moral hazard, changing the risk management practices of farmers.

Pages: 45 pages
Date: 2012
New Economics Papers: this item is included in nep-agr, nep-ias and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.business.uwa.edu.au/__data/assets/pdf_ ... s-Deal-with-Risk.pdf

Related works:
Journal Article: How Australian farmers deal with risk (2013)
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:uwa:wpaper:12-07

Access Statistics for this paper

More papers in Economics Discussion / Working Papers from The University of Western Australia, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sam Tang ().