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Abstract

Crop insurance is an area of federal agricultural policy that has been a source of continual calls for reform and improvement, yet there are a limited number of empirical studies examining farmers' insurance purchase decisions. As far as we are aware, this study is the first to utilize farm level data from the Southeastern U.S. We look at the farmer's decision to purchase or not purchase crop insurance using data from Georgia cotton and peanut farmers. We find that farmers appear to do a good job of weighing the benefits of crop insurance against alternative forms of self-insuring and risk-diversification.

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