A test on adverse selection of farmers in crop insurance: Results from Inner Mongolia, China
Adverse selection is an operating risk of crop insurance. Based on survey data on crop insurance collected by questionnaires in Inner Mongolia, China, the paper uses non-parametric analysis and econometric models to estimate the relationship between conditions for crop production and farmers' i...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Elsevier
2017-02-01
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| Series: | Journal of Integrative Agriculture |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2095311916614405 |
| _version_ | 1818643221322924032 |
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| author | Yuan-feng ZHAO Zhi-hui CHAI Michael S. Delgado Paul V. Preckel |
| author_facet | Yuan-feng ZHAO Zhi-hui CHAI Michael S. Delgado Paul V. Preckel |
| author_sort | Yuan-feng ZHAO |
| collection | DOAJ |
| description | Adverse selection is an operating risk of crop insurance. Based on survey data on crop insurance collected by questionnaires in Inner Mongolia, China, the paper uses non-parametric analysis and econometric models to estimate the relationship between conditions for crop production and farmers' insurance decision in order to test the existence of farmers' adverse selection. The results show farmers' adverse selection does exist, but settling a claim by negotiation and premium subsidy from governments at all levels can defuse farmers' adverse selection under the current system of crop insurance. Risk regionalization, heterogeneous insurance contract and product innovation may decrease adverse selection to some extent. |
| first_indexed | 2024-12-16T23:55:30Z |
| format | Article |
| id | doaj.art-7ecf06dcd5504c4bb4497873ef13a056 |
| institution | Directory Open Access Journal |
| issn | 2095-3119 |
| language | English |
| last_indexed | 2024-12-16T23:55:30Z |
| publishDate | 2017-02-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Journal of Integrative Agriculture |
| spelling | doaj.art-7ecf06dcd5504c4bb4497873ef13a0562022-12-21T22:11:13ZengElsevierJournal of Integrative Agriculture2095-31192017-02-01162478485A test on adverse selection of farmers in crop insurance: Results from Inner Mongolia, ChinaYuan-feng ZHAO0Zhi-hui CHAI1Michael S. Delgado2Paul V. Preckel3College of Economics and Management, Inner Mongolia Agricultural University, Hohhot 010010, P.R. ChinaCollege of Economics and Management, Inner Mongolia Agricultural University, Hohhot 010010, P.R. ChinaDepartment of Agricultural Economics, Purdue University, West Lafayette 47907, USA; Correspondence Michael S. DelgadoDepartment of Agricultural Economics, Purdue University, West Lafayette 47907, USAAdverse selection is an operating risk of crop insurance. Based on survey data on crop insurance collected by questionnaires in Inner Mongolia, China, the paper uses non-parametric analysis and econometric models to estimate the relationship between conditions for crop production and farmers' insurance decision in order to test the existence of farmers' adverse selection. The results show farmers' adverse selection does exist, but settling a claim by negotiation and premium subsidy from governments at all levels can defuse farmers' adverse selection under the current system of crop insurance. Risk regionalization, heterogeneous insurance contract and product innovation may decrease adverse selection to some extent.http://www.sciencedirect.com/science/article/pii/S2095311916614405crop insurancefarmersadverse selection |
| spellingShingle | Yuan-feng ZHAO Zhi-hui CHAI Michael S. Delgado Paul V. Preckel A test on adverse selection of farmers in crop insurance: Results from Inner Mongolia, China Journal of Integrative Agriculture crop insurance farmers adverse selection |
| title | A test on adverse selection of farmers in crop insurance: Results from Inner Mongolia, China |
| title_full | A test on adverse selection of farmers in crop insurance: Results from Inner Mongolia, China |
| title_fullStr | A test on adverse selection of farmers in crop insurance: Results from Inner Mongolia, China |
| title_full_unstemmed | A test on adverse selection of farmers in crop insurance: Results from Inner Mongolia, China |
| title_short | A test on adverse selection of farmers in crop insurance: Results from Inner Mongolia, China |
| title_sort | test on adverse selection of farmers in crop insurance results from inner mongolia china |
| topic | crop insurance farmers adverse selection |
| url | http://www.sciencedirect.com/science/article/pii/S2095311916614405 |
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