Modeling changes in the U.S. demand for crop insurance during the 1990s

The crop insurance purchase decision for a group of Kansas farmers is analyzed using farm-level data from the 1990s, a period that experienced many changes in the federal crop insurance program. Results indicate a reduction in the elasticity of the demand for crop insurance with respect to premium r...

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Bibliographic Details
Published in:Agricultural finance review 2003-11, Vol.63 (2), p.109-125
Main Authors: Serra, Teresa, Goodwin, Barry K., Featherstone, Allen M.
Format: Article
Language:English
Subjects:
Crop insurance
Crops
Demand elasticity
Elasticity of demand
Policy changes
Premium subsidies
Revenue insurance
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Summary:The crop insurance purchase decision for a group of Kansas farmers is analyzed using farm-level data from the 1990s, a period that experienced many changes in the federal crop insurance program. Results indicate a reduction in the elasticity of the demand for crop insurance with respect to premium rates by the end of the decade. The reduction in demand elasticity corresponded with a considerable increase in government subsidies by the end of the 1990s. This result may also reflect the attractiveness of new revenue insurance products which may have made producers less sensitive to premium changes.
ISSN:0002-1466
2041-6326
DOI:10.1108/00215030380001144