2020
DOI: 10.1111/agec.12558
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Input use under cost‐of‐production crop insurance: Theory and evidence

Abstract: There have been a number of previous studies that examined the effects of yield-or revenue-based crop insurance products on input use of farmers. However, no study has specifically investigated the input use impacts of a cost-of-production (COP) crop insurance policy, even though this type of crop insurance is the predominant one used in several other countries outside of the United States (such as the Philippines and China). This article aims to theoretically and empirically examine the effect of a COP crop i… Show more

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Cited by 17 publications
(14 citation statements)
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“…Theoretically, agricultural insurance is supposed to contribute to agricultural output and low-carbon agricultural development in the following two ways: On the one hand, moral hazard and adverse selection under the agricultural insurance system reduce farmers' investment willingness, reduce their enthusiasm for chemical investment, and improve the agricultural ecological environment. On the other hand, agricultural insurance may encourage farmers to adopt green agricultural techniques, which will affect pesticide use and fertilization structure [12,13]. Empirical studies and field trial results also support the theoretical prediction of agricultural insurance on green production [14,15].…”
Section: Introductionmentioning
confidence: 76%
“…Theoretically, agricultural insurance is supposed to contribute to agricultural output and low-carbon agricultural development in the following two ways: On the one hand, moral hazard and adverse selection under the agricultural insurance system reduce farmers' investment willingness, reduce their enthusiasm for chemical investment, and improve the agricultural ecological environment. On the other hand, agricultural insurance may encourage farmers to adopt green agricultural techniques, which will affect pesticide use and fertilization structure [12,13]. Empirical studies and field trial results also support the theoretical prediction of agricultural insurance on green production [14,15].…”
Section: Introductionmentioning
confidence: 76%
“…The agricultural insurance sector is currently a large and rapidly expanding component of producer-oriented governmental support programs (Mahul and Stutley 2010; Smith and Glauber 2012; Glauber 2013; Belasco 2020). This has prompted a large volume of research over a diverse set of outcomes such as input and land-use decisions (Young et al 2001; Zhong et al 2007; Fadhliani et al 2019; He et al 2020), environmental and conservation outcomes (Schoengold et al 2015; Claassen et al 2017), agricultural marketing (Du et al 2015; Jablonski et al 2022), farm financing (Ifft et al 2015; Cariappa et al 2020), the use of other risk mitigation strategies (O’Donoghue et al 2009; Deryugina and Konar 2017; Turner and Tsiboe 2022), and the participation in other programs that comprise the farm safety net (Möllmann et al 2019). One challenge that researchers in this domain face is that endogeneity exists in most empirical analysis involving measures of crop insurance demand.…”
Section: Introductionmentioning
confidence: 99%
“…For a hybrid rainfall-yield index insurance offered to Bangladeshi rice farmers, Hill et al (2019) find a 16% increase of input expenditures, but not on production or yields. For a cost-of production insurance for corn farmers in the Philippines, He et al (2020) find, as well, increases in fertilizers and total chemical expenditures.…”
Section: Introductionmentioning
confidence: 90%