Three Essays on Crop Insurance: RMA's Rules and Participation, and Perceptions

The purpose of this dissertation is to examine further the factors that influence farmers’ decisions to participate in crop insurance programs. The factors considered are RMA rules and farmers’ yield perceptions. In particular, the first paper examined the role of Risk Management Agency’s (RMA) APH calculation rules on the performance, participation, and risk protection level of actual producer history (APH) insurance. The second and third papers examined the presence of behavioral biases, such as miscalibration and better-than-average (BTA) effect in farmers’ perceptions, and related these biases to the participation. Examination of RMA rules that omit trend and sample size variability revealed that the current rules create a significant lag in yields, leading to the lower protection levels under APH yields. Results from the second and third papers showed presence of the BTA effect in directly elicited yields while revealing no such relationship for yield elicited under probabilistic framework. However, the econometric results showed no relationship between subjective yields and crop insurance purchase, suggesting that the BTA effect could be due to the elicitation format.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Agricultural and Consumer Economics

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2009

Author dc:creator

• Umarov, Alisher

Contributors dc:contributor

• Sherrick, Bruce J.
• Garcia, Philip
• Irwin, Scott H.
• Schnitkey, Gary D.
• Pollet, Joshua

• crop insurance
• overconfidence
• RMA rules

Statement dc:rights

• Copyright 2009 Alisher Umarov

Language dc:language

eng

Handle dc:identifier

http://hdl.handle.net/2142/14270

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/14270