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Area‐Yield Crop Insurance Reconsidered
Author(s) -
Miranda Mario J.
Publication year - 1991
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 - 10.2307/1242708
Subject(s) - crop insurance , yield (engineering) , moral hazard , adverse selection , crop , actuarial science , agricultural economics , business , crop yield , insurance policy , economics , agronomy , agriculture , incentive , geography , microeconomics , materials science , archaeology , metallurgy , biology
One of the more promising proposals for reforming the federal crop insurance program calls for both premium rates and indemnities to be based not on the producer's individual yield but rather on the aggregate yield of a surrounding area. Area‐yield crop insurance can provide more effective yield‐loss coverage than individually tailored insurance, without most of the adverse selection and moral hazard problems that have historically undermined the actuarial performance of the federal crop insurance program.