nep-ias New Economics Papers
on Insurance Economics
Issue of 2018‒09‒24
25 papers chosen by
Soumitra K. Mallick
Indian Institute of Social Welfare and Business Management
  1. The demand for public-private crop insurance and government disaster relief By Liesivaara, Petri; Myyrä, Sami
  2. Health Insurance and College Enrollment: Evidence from a Natural Experiment of the Affordable Care Act Dependent Coverage Mandate By Li, Yajuan; Palma, Marco A.
  3. The Market Structure for Crop Insurance and the Effects on Insurance Contracts By DeLay, Nathan D.; Chouinard, Hayley H.; Walters, Cory G.; Wandschneider, Philip R.
  4. Crop Insurance Moral Hazard from Price and Weather Forecasts By Yu, Jisang; Hendricks, Nathan P.
  5. Simulating Crop Insurance Demand Under Prospect Theory By Sproul, Thomas W.; Michaud, Clayton P.
  6. Crop Insurance Education: What we have learned in New York By Jaromczyk, Jerzy; Ifft, Jennifer; Woodard, Joshua
  7. On the Efficiency of Pseudo Risk Pools and Proxy Yield Data on Crop Insurance and Reinsurance in U.S. By Awondo, Sebastain N.; Shurley, Don W.
  8. Does Health Insurance Provision Improve Self-Employment and Entrepreneurship? Evidence from State Insurance Mandates By Li, Yajuan; Palma, Marco A.; Towne, Samuel
  9. Understanding Crop Insurance Barriers for Organic and Diversified Farms By Belasco, Eric
  10. Investigating the Impact of Climate Change on the Demand for Index Insurance By Dougherty, John; Flatnes, Jon Einar; Gallenstein, Richard; Miranda, Mario J.; Sam, Abdoul G.
  11. Does Crop Insurance Really Reassure Farmers? A Puzzle and its Explanations Based on Field Data By He, Juan; Zheng, Xiaoyong
  12. Impacts of Climate change on Federal Crop Insurance Loss Ratios By Yi, Jing; Richardson, James W.; Bryant, Henry L.; Worqlul, Abeyou W.
  13. The Possibility of Implementing the Area Yield Index Rice Insurance Product in Thailand By Bunyasiri, Isriya N.; Sirisupluxana, Prapinwadee
  14. Joint Liability Group Credit Linked with Index Insurance: A Dynamic Game Framework By Chen, Jian; Miranda, Mario J.
  15. Federal crop insurance participation and adoption of sustainable production practices by U.S. farms By Ifft, Jennifer; Jodlowski, Margaret
  16. Asset Pricing with Endogenously Uninsurable Tail Risk By Hengjie Ai; Anmol Bhandari
  17. Farm decison-making and the cost of coverage implications of changes to federal crop insurance premium subsidy structure By Heerman, Kari E.R.; Cooper, Joseph; Johansson, Robert; Worth, Thomas
  18. Risk Aversion And Pesticide Use: Further Insights From Prospect Theory By Carpentier, Alain
  19. Willingness to Pay for Tomato Price Insurance in Beijing-Tianjin-Hebei By Guan, Xue; Ahrendsen, Bruce L.; Liu, Yumei
  20. The Impact of LIBOR Linked Borrowing to Cover Venture Bank Investment Loans Creates a New Systemic Risk By Brian P. Hanley
  21. Neoclassical approach to traditional business insurance - introduction to the theory of agricultural insurance By Kulawik, Jacek
  22. Whether Residents’ Environmental Risk Perceptions Affect Their Attitudes toward Medical Insurance: Evidence from China By Ding, Jinxiu; Yu, Chin-Hsien; Li, Ding; Fang, Lei
  23. Does New Rural Social Pension Insurance Relieve Depression of the Elderly in Rural China :Evidence from the China Health and Retirement Longitudinal Study By Zheng, Xiaodong; Fang, Xiangming; Barger, Brian
  24. Portfolio similarity and asset liquidation in the insurance industry By Girardi, Giulio; Hanley, Kathleen Weiss; Nikolova, Stanislava; Pelizzon, Loriana; Getmansky, Mila
  25. Asset Insulators By Gabriel Chodorow-Reich; Andra Ghent; Valentin Haddad
  1. By: Liesivaara, Petri; Myyrä, Sami
    Abstract: Insurance premium subsidies and disaster relief payments are government actions that can help to smooth farmers’ incomes between years. In the EU crop insurance based on public-private partnership is promoted. We present an analysis based on farmers’ stated preferences with split data approach of crop insurance and disaster relief provided by the government. Results reveal that farmers’ willingness to pay for crop insurance is conditional on the prospect for government disaster relief.
    Keywords: Agricultural Finance, Risk and Uncertainty
    Date: 2017–08–28
    URL: http://d.repec.org/n?u=RePEc:ags:eaae17:261178&r=ias
  2. By: Li, Yajuan; Palma, Marco A.
    Keywords: Consumer/Household Economics, Institutional and Behavioral Economics, Health Economics and Policy
    Date: 2017–07–03
    URL: http://d.repec.org/n?u=RePEc:ags:aaea17:258490&r=ias
  3. By: DeLay, Nathan D.; Chouinard, Hayley H.; Walters, Cory G.; Wandschneider, Philip R.
    Keywords: Agricultural and Food Policy, Agricultural Finance, Industrial Organization
    Date: 2017–07–03
    URL: http://d.repec.org/n?u=RePEc:ags:aaea17:258357&r=ias
  4. By: Yu, Jisang; Hendricks, Nathan P.
    Keywords: Risk and Uncertainty, Agricultural and Food Policy, Production Economics
    Date: 2017–07–03
    URL: http://d.repec.org/n?u=RePEc:ags:aaea17:258336&r=ias
  5. By: Sproul, Thomas W.; Michaud, Clayton P.
    Keywords: Risk and Uncertainty
    Date: 2018–04–07
    URL: http://d.repec.org/n?u=RePEc:ags:scc018:276159&r=ias
  6. By: Jaromczyk, Jerzy; Ifft, Jennifer; Woodard, Joshua
    Keywords: Risk and Uncertainty
    Date: 2018–04–07
    URL: http://d.repec.org/n?u=RePEc:ags:scc018:276158&r=ias
  7. By: Awondo, Sebastain N.; Shurley, Don W.
    Keywords: Risk and Uncertainty, Agricultural Finance, Research Methods/Statistical Methods
    Date: 2017–07–03
    URL: http://d.repec.org/n?u=RePEc:ags:aaea17:258566&r=ias
  8. By: Li, Yajuan; Palma, Marco A.; Towne, Samuel
    Keywords: Consumer/Household Economics, Health Economics and Policy, Institutional and Behavioral Economics
    Date: 2017–07–03
    URL: http://d.repec.org/n?u=RePEc:ags:aaea17:258399&r=ias
  9. By: Belasco, Eric
    Keywords: Risk and Uncertainty
    Date: 2018–04–06
    URL: http://d.repec.org/n?u=RePEc:ags:scc018:276147&r=ias
  10. By: Dougherty, John; Flatnes, Jon Einar; Gallenstein, Richard; Miranda, Mario J.; Sam, Abdoul G.
    Keywords: Environmental Economics and Policy, International Development, Institutional and Behavioral Economics
    Date: 2017–07–03
    URL: http://d.repec.org/n?u=RePEc:ags:aaea17:258524&r=ias
  11. By: He, Juan; Zheng, Xiaoyong
    Keywords: Risk and Uncertainty, Institutional and Behavioral Economics, Agribusiness
    Date: 2017–07–03
    URL: http://d.repec.org/n?u=RePEc:ags:aaea17:258398&r=ias
  12. By: Yi, Jing; Richardson, James W.; Bryant, Henry L.; Worqlul, Abeyou W.
    Keywords: Risk and Uncertainty, Environmental Economics and Policy, Agricultural Finance
    Date: 2017–07–03
    URL: http://d.repec.org/n?u=RePEc:ags:aaea17:258512&r=ias
  13. By: Bunyasiri, Isriya N.; Sirisupluxana, Prapinwadee
    Keywords: Risk and Uncertainty
    Date: 2018–04–07
    URL: http://d.repec.org/n?u=RePEc:ags:scc018:276157&r=ias
  14. By: Chen, Jian; Miranda, Mario J.
    Keywords: Community/Rural/Urban Development, Risk and Uncertainty, Agricultural and Food Policy
    Date: 2017–07–03
    URL: http://d.repec.org/n?u=RePEc:ags:aaea17:258531&r=ias
  15. By: Ifft, Jennifer; Jodlowski, Margaret
    Keywords: Risk and Uncertainty
    Date: 2018–04–06
    URL: http://d.repec.org/n?u=RePEc:ags:scc018:276148&r=ias
  16. By: Hengjie Ai; Anmol Bhandari
    Abstract: This paper studies asset pricing in a setting in which idiosyncratic risk in human capital is not fully insurable. Firms use long-term contracts to provide insurance to workers, but neither side can commit to these contracts; furthermore, worker-firm relationships have endogenous durations owing to costly and unobservable effort. Uninsured tail risk in labor earnings arises as a part of an optimal risk-sharing scheme. In the general equilibrium, exposure to the resulting tail risk generates higher risk premia, more volatile returns, and variations in expected returns across firms. Model outcomes are consistent with the cyclicality of factor shares in the aggregate, and the heterogeneity in exposures to idiosyncratic and aggregate shocks in the cross section.
    JEL: E24 G12 J3
    Date: 2018–08
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:24972&r=ias
  17. By: Heerman, Kari E.R.; Cooper, Joseph; Johansson, Robert; Worth, Thomas
    Keywords: Agricultural and Food Policy, Risk and Uncertainty
    Date: 2018–04–06
    URL: http://d.repec.org/n?u=RePEc:ags:scc018:276144&r=ias
  18. By: Carpentier, Alain
    Abstract: Prospect Theory suggests that farmers’ attitudes toward pest risks depend on the situation they refer to when facing crop protection decisions. Farmers referring to the ‘protected crop’ situation may implement self-insurance pesticide treatments while farmers referring to the ‘unprotected crop’ situation are risk neutral toward pest risks. Importantly, farmers are more likely to refer to the ‘protected crop’ situation when pesticides are relatively inexpensive. This in turn leads to original results related to the regulation of agricultural pesticide uses. For instance, pesticide taxes would not only impact pesticide expected profitability but also farmers’ attitude toward pest risks.
    Keywords: Environmental Economics and Policy
    Date: 2017–08–28
    URL: http://d.repec.org/n?u=RePEc:ags:eaae17:261265&r=ias
  19. By: Guan, Xue; Ahrendsen, Bruce L.; Liu, Yumei
    Keywords: Risk and Uncertainty, Agricultural Finance, Demand and Price Analysis
    Date: 2017–06–30
    URL: http://d.repec.org/n?u=RePEc:ags:aaea17:258260&r=ias
  20. By: Brian P. Hanley
    Abstract: A scenario in which regulators take the drastic step of requiring coverage of all venture bank investment loans using interbank borrowed funds is considered. In this scenario, a minimal amount of default insurance is used, such that Tier 1 and 2 capital requirements are still met. To do this, the default insurance percentage on all investment loans is cut to 3.88%, although the minimum is 2.88%. Results: For a portfolio of 1.31X (ten year total conventional return) or better, at interest rates of 2% or better, the venture bank survives and can have excellent returns. For a portfolio of 1.5X (ten year total conventional return) the bank can have extraordinary returns below 1.5% interest and survive up to 3%. interest. However, if returns fall, or interest rates rise, then venture banks go underwater quite rapidly. Conclusion: Using LIBOR funds limits profitability, and damages stability of the bank, with no visible benefit to any party, thus creating a new systemic risk to the banking system.
    Date: 2018–08
    URL: http://d.repec.org/n?u=RePEc:arx:papers:1809.01987&r=ias
  21. By: Kulawik, Jacek
    Abstract: The contemporary agriculture is among the most risky economic activities. In addition to the previously known production, price and market risk, and later also the financial risk, today agricultural producers are increasingly more often confronted with institutional risk and personnel management risk and risk related to climate change. On the other hand, farmers have at their disposal numerous tools and strategies to counteract threats and mitigate their negative effects. Among these risk management instruments and strategies, traditional/ conventional insurance of crops, livestock and tangible assets is still important. In this context, the basic goal of the article is to generalise the theoretical foundations of the above-mentioned insurance, but limited to their historically oldest approach; hence on the basis of neoclassical microeconomics and classical decision theory. According to the convention existing, the essence of the theory/hypothesis of the expected utility of von Neumann–Morgenstern is first analysed. In the last part of the article, the assumptions of the expected utility theory are concretised on the example of agricultural insurance.
    Keywords: Agricultural and Food Policy, Agricultural Finance, Financial Economics
    Date: 2018
    URL: http://d.repec.org/n?u=RePEc:ags:iafepa:276371&r=ias
  22. By: Ding, Jinxiu; Yu, Chin-Hsien; Li, Ding; Fang, Lei
    Keywords: Institutional and Behavioral Economics, Risk and Uncertainty, Consumer/Household Economics
    Date: 2017–06–30
    URL: http://d.repec.org/n?u=RePEc:ags:aaea17:258258&r=ias
  23. By: Zheng, Xiaodong; Fang, Xiangming; Barger, Brian
    Keywords: Agricultural and Food Policy, Agribusiness, Consumer/Household Economics
    Date: 2017–07–03
    URL: http://d.repec.org/n?u=RePEc:ags:aaea17:258401&r=ias
  24. By: Girardi, Giulio; Hanley, Kathleen Weiss; Nikolova, Stanislava; Pelizzon, Loriana; Getmansky, Mila
    Abstract: An important assumption underlying the designation of some insurers as systemically important is that their overlapping portfolio holdings can result in common selling. We measure the overlap in holdings using cosine similarity, and show that insurers with more similar portfolios have larger subsequent common sales. This relationship can be magnified for some insurers when they are regulatory capital constrained or markets are under stress. When faced with an exogenous liquidity shock, insurers with greater portfolio similarity have even larger common sales that impact prices. Our measure can be used by regulators to predict which institutions may contribute most to financial instability through the asset liquidation channel of risk transmission.
    Keywords: Interconnectedness,Asset Liquidation,Similarity,Financial Stability,Insurance Companies,SIFI
    JEL: G11 G18 G2
    Date: 2018
    URL: http://d.repec.org/n?u=RePEc:zbw:safewp:224&r=ias
  25. By: Gabriel Chodorow-Reich; Andra Ghent; Valentin Haddad
    Abstract: We propose that financial institutions can act as asset insulators, holding assets for the long run to protect their valuations from consequences of exposure to financial markets. We demonstrate the empirical relevance of this theory for the balance sheet behavior of a large class of intermediaries, life insurance companies. The pass-through from assets to equity is an especially informative metric for distinguishing the asset insulator theory from Modigliani-Miller or other standard models. We estimate the pass-through using security-level data on insurers’ holdings matched to corporate bond returns. Uniquely consistent with the insulator view, outside of the 2008-2009 crisis insurers lose as little as 15 cents in response to a dollar drop in asset values, while during the crisis the pass-through rises to roughly 1. The rise in pass-through highlights the fragility of insulation exactly when it is most valuable.
    JEL: G01 G1 G14 G22 G32
    Date: 2018–08
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:24973&r=ias
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