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Crop Revenue and Yield Insurance Demand: A Subjective Probability Approach

Published online by Cambridge University Press:  26 January 2015

Saleem Shaik ,
Keith H. Coble ,
Thomas O. Knight ,
Alan E. Baquet  and
George F. Patrick
Saleem Shaik
Affiliation:
North Dakota State University, Fargo, ND
Keith H. Coble
Affiliation:
Department of Agricultural Economics at Mississippi State University, Mississippi State, MS
Thomas O. Knight
Affiliation:
Department of Agricultural Economics at Texas Tech University, Lubbock, TX
Alan E. Baquet
Affiliation:
Department of Agricultural Economics, University of Nebraska, Lincoln, NE
George F. Patrick
Affiliation:
Department of Agricultural Economics at Purdue University, West Lafayette, IN
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Abstract

A multinomial logit is utilized to model the choice of whether to purchase yield or revenue insurance using subjectively elicited survey data. Our results indicate that the demand for crop insurance is inelastic (−0.40), consistent with most earlier yield elasticity estimates, but the elasticity for choices between yield and revenue insurance is found to be relatively more elastic (−0.88).

Keywords

crop insuranceelasticitiesmultinomial logit modelrevenue demandsubjective elicitationsurveyQ18
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 40 , Issue 3 , December 2008 , pp. 757 - 766
Copyright
Copyright © Southern Agricultural Economics Association 2008

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