nep-ias New Economics Papers
on Insurance Economics
Issue of 2010‒05‒29
five papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Bussiness Management

  1. Demand for Crop Insurance by Organic Corn and Soybean Farmers in Three Major Producing States By Singerman, Ariel; Hart, Chad E.; Lence, Sergio H.
  2. Evaluating the Health Effects of Micro Health Insurance Placement: Evidence from Bangladesh By Jennifer Roberts; Paul Mosley; Syed Abdul Hammid
  3. More Than a Wing and a Prayer: Government Indemnification of the Commercial Space Launch Industry By Timothy J. Brennan; Carolyn Kousky; Molly Macauley
  4. Measuring the dependence structure between yield and weather variables By Bokusheva, Raushan
  5. Can Social Security Boost Domestic Consumption in the People’s Republic of China? By Wang Dewen

  1. By: Singerman, Ariel; Hart, Chad E.; Lence, Sergio H.
    Abstract:  Abstract A survey of organic grain and oilseed producers in Iowa, Minnesota and Wisconsin was conducted to collect information about their demographic characteristics, production and price risk management strategies, yields and losses, and crop insurance decisions. The data are analyzed using a discrete choice model to establish which variables influence organic producers’ decision of whether to purchase crop insurance and also which ones affect the insurance product choice when applicable. The study describes the risk profiles of organic producers, and analyzes whether significant variations exist between organic and conventional methods of production so as to quantitatively determine the differential production risk associated with organic production. This research may contribute to the design of an organic crop insurance policy in which organic producers would be charged according to their idiosyncratic production risks, rather than the arbitrary 5% blanket premium surcharge currently in use.  
    Date: 2010–05–23
  2. By: Jennifer Roberts (Department of Economics, The University of Sheffield Author-Person=pro228); Paul Mosley (Department of Economics, The University of Sheffield); Syed Abdul Hammid
    Abstract: We examine the impact of micro health insurance placement on health awareness, healthcare utilization and health status of microcredit members in rural Bangladesh, using data from 329 households in the operating areas of Grameen Bank. The results are based on econometric analysis conditioned on placement of the scheme, and show that placement has a positive association with all of the outcomes. The results are statistically significant for health awareness and healthcare utilization, but not for heath status. Our study makes an important contribution to the literature as it provides evidence on the impact of MHI on a broad set of health outcomes.
    Keywords: Microcredit, Micro Health Insurance, Grameen Bank, Bangladesh
    JEL: O12
    Date: 2010–04
  3. By: Timothy J. Brennan (University of Maryland-Baltimore County); Carolyn Kousky (Resources for the Future); Molly Macauley (Resources for the Future)
    Abstract: Using rockets to launch communications satellites and other spacecraft poses risks to the uninvolved public, including persons and property under the flight path of the launch vehicle. The federal government plays a pivotal technical role during the actual launch by carrying out certain risk-related procedures, thus causing third-party risk to be jointly produced by the company and the government. In addition, under the Commercial Space Launch Act, the government partially indemnifies commercial launch companies for third-party damages. We compare the indemnification policy to optimal liability rules under public-private co-production of risk. Under modest assumptions, shared liability created by the indemnification rules decreases the incentive of both parties to take care relative to the optimum. If care were observable, it would be preferable for the government to fully indemnify companies that take due care. The role of the government as an agent for third parties may qualify these findings.
    Keywords: government indemnification, liability, insurance, space transportation
    JEL: L51 L98
    Date: 2009–09–01
  4. By: Bokusheva, Raushan
    Abstract: The design and pricing of weather-based crop insurance and weather derivatives is strongly based on an implicit assumption that the dependence structure between yields and weather variables remains unchanged over time. In this paper, we prove this assumption based on empirical time series of weather variables and farm wheat yields from Kazakhstan over the period from 1961 to 2003. By employing two different methods to measure dependence in multivariate distributions – the regression analysis and copula approach – we reveal statistically significant temporal changes in the joint distribution of relevant variables. These empirical results indicate that greater effort is required to capture potential temporal changes in the dependence between yield and weather variables, and subsequently to consider them in the design and rating of weather-based insurance instruments.
    Keywords: weather-based index insurance; dependence structure; copula estimation; Bayesian hierarchical model; Kazakhstan.
    JEL: C32 G22 C11
    Date: 2010–04
  5. By: Wang Dewen
    Abstract: This paper reviews the development of the social security system and trends in the urban labor market in the People’s Republic of China (PRC). Despite its remarkable economic achievement, the PRC faces a difficult path before it can reform and improve its social security system and provide basic support for all of its people. The unemployment shock has caused rural and urban household income to decrease and has thus slowed down household consumption growth. The provision of broader social security would not only mitigate unemployment shocks in the short term, but it would also guarantee individuals and households more security for spending that could reduce the high savings rate and help achieve a balanced growth path in the long run. [ADBI WP 215].
    Keywords: people, unemployment, households, income inequality, children, insurance, medial, injury, Housing Security, consumption, growth, rural, individuals, savings rate, spending, public transfers, income distribution, development, social security system, urban labour market, China, PRC, economic, reform,
    Date: 2010

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