Open AccessCrop insurance demand in wheat production: focusing on yield gaps and asymmetric information
Author(s) -
Alba Castañeda-Vera,
Antonio Saá-Requejo,
Inés Mínguez,
Alberto Garrido
Publication year - 2018
Publication title -
spanish journal of agricultural research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.337
H-Index - 36
eISSN - 2171-9292
pISSN - 1695-971X
DOI - 10.5424/sjar/2017154-10716
Subject(s) - crop insurance , context (archaeology) , yield (engineering) , crop , agricultural engineering , crop yield , production (economics) , crop production , insurance policy , agricultural economics , econometrics , actuarial science , economics , agriculture , agronomy , geography , microeconomics , engineering , materials science , archaeology , metallurgy , biology
Analysis of yield gaps were conducted in the context of crop insurance and used to build an indicator of asymmetric information. The possible influence of asymmetric information in the decision of Spanish wheat producers to contract insurance was additionally evaluated. The analysis includes simulated yield using a validated crop model, CERES-Wheat previously selected among others, whose suitability to estimate actual risk when no historical data are available was assessed. Results suggest that the accuracy in setting the insured yield is decisive in farmers’ willingness to contract crop insurance under the wider coverage. Historical insurance data, when available, provide a more robust technical basis to evaluate and calibrate insurance parameters than simulated data, using crop models. Nevertheless, the use of crop models might be useful in designing new insurance packages when no historical data is available or to evaluate scenarios of expected changes. In that case, it is suggested that yield gaps be estimated and considered when using simulated attainable yields.