DEVELOPING EXPERIENCE-BASED PREMIUM RATE DISCOUNTS IN CROP INSURANCE
Date
2006-05
Authors
Jin, Yufei
Knight, Thomas
Coble, Keith
Rejesus, Roderick
Journal Title
Journal ISSN
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Publisher
American Journal of Agricultural Economics
Abstract
TIlis article addresses the feasibility of implementing an experience-based premium nlte discount system in crop insurance. While adverse selection and moral hazllrd in crop insurnnce have been extensively studied in the past, discount systems or bonus-malus incentives have not, to our knowledge, been investigated. Our empirical analysis indicates that a crop insurunce discount system could be implemented based on a measure of favorable past insunmce experience. TIle estimated average discounts based on the rating methods developed in this study ranged from 5% to 9% (depending on the crop being considered).
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Citation
Rejesus, R., K. Coble, T. Knight, Y. Jin. "Developing Experience-Based Premium Rate Discounts in Crop Insurance." American Journal of Agricultural Economics, 88 (2, May 2006): 409-419.