SABIIA - Sistema Aberto e Integrado de Informação em Agricultura (Sabiia)

Very little attention has been given to the modeling of yield distribution for crops and regions in which yields exhibit irregular behavior. We undertake a statistical case study of Texas upland cotton and propose an alternative mixture distribution based on regime-switching model in which the conditional distribution of yield depends upon an observable drought index. The results show that the mixture distribution model provides a better fit to the data than conventional parametric distributions and produces higher implied premium rates than the current published Group Risk Plan insurance rates in more than two-thirds of Texas counties examined.

Modeling Texas Dryland Cotton Yields, With Application to Crop Insurance Actuarial Rating

Palavras-chave: Risk and Uncertainty.

Ano: 2006

URL: http://purl.umn.edu/21392

Actuarial Implication of Structural Changes in El Niño-Southern Oscillation Index Dynamics

Texas dryland upland cotton yields have historically exhibited greater variation and more distributional irregularities than the yields of other crops, raising concerns that conventional parametric distribution models may generate biased or otherwise inaccurate crop insurance premium rate estimates. Here, we formulate and estimate regime-switching models for Texas dryland cotton yields in which the distribution of yield is conditioned on local drought conditions. Our results indicate that drought-conditioned regime-switching models provide a better fit to Texas county-level dryland cotton yields than conventional parametric distribution models. They do not, however, generate significantly different Group Risk Plan crop insurance premium rate estimates.

Tipo: Journal Article

Palavras-chave: Actuarial rating; Adverse selection; Cotton; Crop insurance; Group risk plan; Regime-switching; Yield distribution; Agribusiness; Crop Production/Industries; Farm Management; Q10; Q14; Q18.

Ano: 2008

URL: http://purl.umn.edu/45522

Chen, Shu-Ling.

The influence of climate variability on agricultural production and financial risks faced by an individual or an institution has been the center of the public discussion in the recent years. The changing weather patterns and environmental conditions could cause substantial unpredicted economic loss. Failure to capture the changing climate would underestimate the insurance contract’s expected indemnity and further create a major obstacle for insurance sectors. In this paper, we undertake a case study of El Niño-Southern Oscillation Index insurance for coastal Peru proposed by Skees. We examined the behavior of El Niño dynamics and found El Niño indices are changing over time. A class of generalized autoregressive conditional heteroskedasticity (GARCH)...

Acreage Abandonment, Moral Hazard and Crop Insurance

Palavras-chave: Actuarial rating; Climate variability; El Niño; Fractional integration ARCH; FIGARCH; Index insurance; Structural change; Agricultural Finance; Financial Economics; Risk and Uncertainty; G21; G22; Q10; Q14.

Ano: 2010

URL: http://purl.umn.edu/61384

Chen, Shu-Ling.

Empirical evidence for the existence of moral hazard in the U.S. crop insurance program has been inconclusive. Here we use a nested-dynamic programming framework to estimate an intra-seasonal dynamic model that explicitly incorporates a farmer's crop abandonment decision. The estimation is implemented for selected Texas counties where actuarial performances of the crop insurance program are poor and high incidences of acreage abandonment are frequently observed.

MODELING MULTIVARIATE CROP YIELD DENSITIES WITH FREQUENT EXTREME EVENTS

Palavras-chave: Farm Management.

Ano: 2005

URL: http://purl.umn.edu/19114

Measuring the lower tail of a crop yield distribution is important for managing agricultural production risk and rating crop insurance. Common parametric techniques encounter difficulties when attempting to model extreme yield events. We evaluate and compare alternative models based on our candidate distributions for high risk counties.

Modeling Temperature Dynamics for Aquaculture Index Insurance In Taiwan: A Nonlinear Quantile Approach

Palavras-chave: Research Methods/ Statistical Methods.

Ano: 2004

URL: http://purl.umn.edu/19970

Chen, Shu-Ling.

According to the Taiwan Council of Agriculture, frost was responsible for approximately 30 percent of aquaculture losses in Taiwan during the period 1999-2008. Farmed milkfish, the most important aquaculture crop in Taiwan, is particularly sensitive to temperature variations, and can experience widespread kills whenever temperatures fall below 14°C for sustained periods of time. Temperatures below this critical minimum, however, are not uncommon during the January-March winter months. The purpose of our study is to analyze the possible benefits and the actuarial properties of temperature-based index insurance for the farmed milkfish industry in Kaohsiung County, Taiwan. Weather-based index insurance has been promoted as a cost-effective means of...

Effects of Insurance on Farmer Crop Abandonment

Palavras-chave: Nonlinear quantile; Temperature risk; Weather index insurance; Agricultural Finance; Financial Economics; Risk and Uncertainty.

Ano: 2011

URL: http://purl.umn.edu/104229

Empirical evidence for the existence of moral hazard in the U.S. crop insurance program has been inconclusive. Here, we seek empirical evidence of moral hazard in the U.S. crop insurance program, departing from the established empirical literature in two significant respects. First, we attempt to uncover evidence of moral hazard by examining the effects of crop insurance on post-planting crop abandonment decisions. Second, we expand to the scope of existing empirical studies by including regions and crops that have historically experienced high loss ratios under the Federal crop insurance program. Our results provide strong evidence that insurance participation encourages producers to abandon their crops during the growing season for corn in Central...