A Two-Stage Model of the Demand for Specialty Crop Insurance

Journal of Agricultural and Resource Economics

关键词: california;    crop insurance;    discrete/continuous choice;    grapes;    ordered probit;   

DOI  :  10.22004/ag.econ.30828

来源: DOAJ

【 摘 要 】

Recent proposals to reform the federal Multiple-Peril Crop Insurance Program for specialty crops raised concerns that a higher cost for catastrophic-level coverage would significantly reduce program participation. This study estimates the demand for three levels of insurance coverage (50%, 65%, 75%) using aggregate data from grape production in 11 California counties from 1986-96. A discrete/continuous econometric model of the choice of coverage level and the amount of insurance finds that the price-elasticity of demand for 50% coverage is elastic, suggesting that premium increases may indeed reduce participation significantly. Such increases may also cause a significant reallocation of growers among coverage levels.

【 授权许可】

Unknown