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Journal of Agricultural and Resource Economics >
Volume 27, Number 01, July 2002 >
Please use this identifier to cite or link to this item:
http://purl.umn.edu/31076
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| Title: | THE ACCURACY OF PRODUCERS' PROBABILITY BELIEFS: EVIDENCE AND IMPLICATIONS FOR INSURANCE VALUATION |
| Authors: | Sherrick, Bruce J. |
| Issue Date: | 2002-07 |
| Abstract: | The accuracy of producers' subjective probability beliefs is examined through a survey of large cash-grain farmers in Illinois. Findings reveal that their subjective probability beliefs about important weather variables are systematically mis-calibrated. The nature and extent of differences between subjective probability beliefs and probabilities based on long-term historic weather data are shown empirically, and through fitted calibration functions. The economic significance of inaccurate subjective probability beliefs is established in the context of insurance valuation. The results demonstrate that significant errors in producers' risk assessments and insurance valuation arise as a consequence of producersÂ’' systematically inaccurate probability beliefs. |
| URI: | http://purl.umn.edu/31076 |
| Institution/Association: | Journal of Agricultural and Resource Economics>Volume 27, Number 01, July 2002 |
| Total Pages: | 17 |
| Language: | English |
| From Page: | 77 |
| To Page: | 93 |
| Collections: | Volume 27, Number 01, July 2002
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| 27010077.pdf | 1217Kb | PDF | View/Open |
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