Premium
Optimal Producer Behavior in the Presence of Area‐Yield Crop Insurance
Author(s) -
Chambers Robert G.,
Quiggin John
Publication year - 2002
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/1467-8276.00300
Subject(s) - yield (engineering) , crop insurance , production (economics) , business , insurance policy , agricultural economics , economics , agricultural science , actuarial science , microeconomics , agriculture , environmental science , geography , archaeology , metallurgy , materials science
Optimal producer behavior in the presence of area‐yield insurance is studied. The producer's optimal production and insurance choices are characterized. The effect of the provision of area‐yield insurance on production patterns is studied, and sufficient conditions for the provision of area‐yield insurance to increase the riskiness of the individual producer's decisions are derived. A separation result is derived for area‐yield insurance contracts and stochastic technologies.