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Economic analysis of the introduction of agricultural revenue insurance contracts in Spain using statistical copulas
Author(s) -
Ahmed Osama,
Serra Teresa
Publication year - 2015
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/agec.12141
Subject(s) - revenue , crop insurance , yield (engineering) , economics , purchasing , agriculture , insurance policy , actuarial science , agricultural economics , finance , ecology , operations management , materials science , metallurgy , biology
This article aims at determining how the introduction of agricultural revenue insurance contracts in Spain will affect the cost of purchasing insurance, relative to yield insurance schemes. We focus our empirical analysis on the apple and orange sectors in Spain. Statistical copulas are used to jointly model price and yield perils. Premium rates under revenue and yield insurance are simulated through Monte Carlo methods. Results indicate that revenue insurance is likely to reduce the price of agricultural insurance in Spain, which may result in higher acceptance and demand for agricultural insurance programs.