Role of Panel Analysis in Identifying Asymmetric Information with Optional Unit Provision in Federal Crop Insurance

This paper has a two-fold contribution, first we demonstrate the relationship of spatial, temporal and residual yield risk estimated from a two-way panel random effects model to asymmetric information with an optional unit provision in the federal crop insurance program. Second, the yield risk components are incorporated in a discrete choice model to examine the presence of asymmetric information due to potential yield switching with optional unit provisions. Empirical application to 1998 U.S. cotton crop insurance data reveals the presence of asymmetric information with optional unit provisions.


Issue Date:
2009-03
Publication Type:
Report
Record Identifier:
http://ageconsearch.umn.edu/record/54983
PURL Identifier:
http://purl.umn.edu/54983
Total Pages:
28
JEL Codes:
D82; G22; Q10
Series Statement:
Agribusiness & Applied Economics Report No.
641




 Record created 2017-04-01, last modified 2018-01-22

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