A test on adverse selection of farmers in crop insurance: Results from Inner Mongolia, China

doi:10.1016/S2095-3119(16)61440-5

Journal of Integrative Agriculture ›› 2017, Vol. 16 ›› Issue (02): 478-485.DOI: 10.1016/S2095-3119(16)61440-5

收稿日期:2016-04-05 出版日期:2017-02-20 发布日期:2017-01-31

A test on adverse selection of farmers in crop insurance: Results from Inner Mongolia, China

ZHAO Yuan-feng¹, CHAI Zhi-hui¹, Michael S. Delgado², Paul V. Preckel²

¹College of Economics and Management, Inner Mongolia Agricultural University, Hohhot 010010, P.R.China ²Department of Agricultural Economics, Purdue University, West Lafayette 47907, USA

Received:2016-04-05 Online:2017-02-20 Published:2017-01-31
Contact: Michael S. Delgado, E-mail: delgado2@purdue.edu
About author:ZHAO Yuan-feng, E-mail: zhaoyf@263.net
Supported by:
This work was sponsored by the National Natural Science Foundation of China (71363042).

摘要/Abstract

Abstract: Adverse selection is an operating risk of crop insurance. Based on survey data on crop insurance collected by questionnaires in Inner Mongolia, China, the paper uses non-parametric analysis and econometric models to estimate the relationship between conditions for crop production and farmers’ insurance decision in order to test the existence of farmers’ adverse selection. The results show farmers’ adverse selection does exist, but settling a claim by negotiation and premium subsidy from governments at all levels can defuse farmers’ adverse selection under the current system of crop insurance. Risk regionalization, heterogeneous insurance contract and product innovation may decrease adverse selection to some extent.

Key words: crop insurance, farmers, adverse selection

ZHAO Yuan-feng, CHAI Zhi-hui, Michael S. Delgado, Paul V. Preckel. [J]. Journal of Integrative Agriculture, 2017, 16(02): 478-485.

ZHAO Yuan-feng, CHAI Zhi-hui, Michael S. Delgado, Paul V. Preckel. A test on adverse selection of farmers in crop insurance: Results from Inner Mongolia, China[J]. Journal of Integrative Agriculture, 2017, 16(02): 478-485.

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