Effects of Insurance Adoption and Risk Aversion on Agricultural Production and Technical Efficiency: A Panel Analysis for Italian Grape Growers
This article aims to evaluate the effect of insurance on production, technical efficiency, and input use of Italian specialised-quality grape growers. A panel instrumental variable stochastic frontier approach is applied over the years 2008–2017 using data from the Farm Accountancy Data Network. The...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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MDPI AG
2022-01-01
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| Series: | Economies |
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| Online Access: | https://www.mdpi.com/2227-7099/10/1/20 |
| _version_ | 1797494598099009536 |
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| author | Simone Russo Francesco Caracciolo Cristina Salvioni |
| author_facet | Simone Russo Francesco Caracciolo Cristina Salvioni |
| author_sort | Simone Russo |
| collection | DOAJ |
| description | This article aims to evaluate the effect of insurance on production, technical efficiency, and input use of Italian specialised-quality grape growers. A panel instrumental variable stochastic frontier approach is applied over the years 2008–2017 using data from the Farm Accountancy Data Network. The results show the requirement to correct for the endogeneity that stems from insurance adoption. Insurance has an enhancing effect on production and efficiency and reduces the use of intermediate inputs. It suggests that insurance helps to diminish the risk-averse farmers’ suboptimal input use due to the presence of uncertainty. Crop insurance leads risk-averse farmers to behave as if they were risk neutral and employs the profit-maximising input vector. Therefore, by reducing the risks linked to the uncertainty of outcomes, crop insurance leads grape growers to go in the direction of profit maximisation. |
| first_indexed | 2024-03-10T01:36:37Z |
| format | Article |
| id | doaj.art-9a6eb9c10e5e44fe96f269ac4fccafd8 |
| institution | Directory Open Access Journal |
| issn | 2227-7099 |
| language | English |
| last_indexed | 2024-03-10T01:36:37Z |
| publishDate | 2022-01-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Economies |
| spelling | doaj.art-9a6eb9c10e5e44fe96f269ac4fccafd82023-11-23T13:32:09ZengMDPI AGEconomies2227-70992022-01-011012010.3390/economies10010020Effects of Insurance Adoption and Risk Aversion on Agricultural Production and Technical Efficiency: A Panel Analysis for Italian Grape GrowersSimone Russo0Francesco Caracciolo1Cristina Salvioni2Department of Agriculture, Food, Natural Resources and Engineering (DAFNE), University of Foggia, 71122 Foggia, ItalyDepartment of Agricultural Sciences, University of Naples, Federico II, 80055 Portici, ItalyDepartment of Economics, University of Chieti-Pescara, 65127 Pescara, ItalyThis article aims to evaluate the effect of insurance on production, technical efficiency, and input use of Italian specialised-quality grape growers. A panel instrumental variable stochastic frontier approach is applied over the years 2008–2017 using data from the Farm Accountancy Data Network. The results show the requirement to correct for the endogeneity that stems from insurance adoption. Insurance has an enhancing effect on production and efficiency and reduces the use of intermediate inputs. It suggests that insurance helps to diminish the risk-averse farmers’ suboptimal input use due to the presence of uncertainty. Crop insurance leads risk-averse farmers to behave as if they were risk neutral and employs the profit-maximising input vector. Therefore, by reducing the risks linked to the uncertainty of outcomes, crop insurance leads grape growers to go in the direction of profit maximisation.https://www.mdpi.com/2227-7099/10/1/20endogenous stochastic frontiercrop insuranceviticulture |
| spellingShingle | Simone Russo Francesco Caracciolo Cristina Salvioni Effects of Insurance Adoption and Risk Aversion on Agricultural Production and Technical Efficiency: A Panel Analysis for Italian Grape Growers Economies endogenous stochastic frontier crop insurance viticulture |
| title | Effects of Insurance Adoption and Risk Aversion on Agricultural Production and Technical Efficiency: A Panel Analysis for Italian Grape Growers |
| title_full | Effects of Insurance Adoption and Risk Aversion on Agricultural Production and Technical Efficiency: A Panel Analysis for Italian Grape Growers |
| title_fullStr | Effects of Insurance Adoption and Risk Aversion on Agricultural Production and Technical Efficiency: A Panel Analysis for Italian Grape Growers |
| title_full_unstemmed | Effects of Insurance Adoption and Risk Aversion on Agricultural Production and Technical Efficiency: A Panel Analysis for Italian Grape Growers |
| title_short | Effects of Insurance Adoption and Risk Aversion on Agricultural Production and Technical Efficiency: A Panel Analysis for Italian Grape Growers |
| title_sort | effects of insurance adoption and risk aversion on agricultural production and technical efficiency a panel analysis for italian grape growers |
| topic | endogenous stochastic frontier crop insurance viticulture |
| url | https://www.mdpi.com/2227-7099/10/1/20 |
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