Centro de Documentacion de Fundación MAPFRE - Recency effects and participation at the extensive and intensive margins in the U.S. Federal Crop Insurance Program

MAP20200005032

Recency effects and participation at the extensive and intensive margins in the U.S. Federal Crop Insurance Program / Yuyuan Che, Hongli Feng, David A. Hennessy

Sumario: Participation in the U.S. Federal Crop Insurance Program (FCIP) has increased over time at both extensive (insured acres) and intensive (coverage level) margins, but there are clear spatio-temporal variations in these trends. Farmers' decisions are likely influenced by recent indemnity or weather experiences (i.e., recency effects). We develop a model to identify two channels through which recent adverse weather experiences may affect participation, one where the weather shocks directly affect participation and the other where they affect participation through indemnity payouts. With historic FCIP data over the period 20012017, we use parametric and non-parametric methods to estimate these effects. At both extensive and intensive margins, higher past indemnities are found to encourage participation. This provides evidence that prior adverse weather shocks work indirectly. Less evidence is found in favour of direct weather effects. We also find that the increase in participation due to indemnities peaks in the year following a loss

En: Geneva papers on risk and insurance : issues and practice. - Geneva : The Geneva Association, 1976- = ISSN 1018-5895. - 01/01/2020 Volumen 45 Número 1 - enero 2020 , p. 52-85

1. Estados Unidos. Programa Federal de Seguro de Cultivos . 2. Participación . 3. Seguros agrarios . 4. Cultivo agrícola . 5. Evaluación del impacto ambiental . 6. Climatología agrícola . 7. Gestión del cambio . 8. Indemnizaciones . 9. Estados Unidos . I. Feng, Hongli . II. Hennessy, David A. . III. Título.