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This paper investigates Chinese agricultural insurance agents willingness to offer (WTO) livestock insurance based on the variations of eight main attributes of livestock insurance.

This study implements discrete choice experiments (DCE) with actual insurance agents who design, sell and operate livestock insurance in China. The choice experiment of this study is based on the D-optimal approach, a six-block design, with 15 cards per block and two choices per card. The sample size was 211. Econometrics results are based on conditional and mixed logit models.

The authors find that the subsidy effect is enormous; a one level increase of subsidy leads to 3.166 times higher probability to offer. This subsidy effect is important as it confirms the endogenous structure between price and quantity in insurance offering, where subsidy does not only incentivize demand but also the supply. Another main factor of insurance investigated is the impact of different coverage types on agents' WTO. The authors find that agents prefer mortality insurance the most, followed by revenue insurance and profit insurance, while Index-Based Livestock Insurance (IBLI) is the least preferred to offer. Agents' knowledge about these newer types of insurance supports their WTO as well; thus, proper education is necessary to promote the more advanced types of livestock insurance.

A limitation is that in the presence of COVID 19, and administrative issues at the local level, the sample was not randomly drawn. Nonetheless, the authors believe that there is enough diversity across participants, insurers and provinces and have done sufficient robustness checks to support results and conclusions.

This study provides further validation for the DCE research method that could potentially be applied to different analyses: using choice experiments to study insurers and reveal their preferences, through combinations of various levels of core attributes for insurance products. The findings and contribution are critical to the reform and improvement of livestock insurance in China and for insurance markets more broadly. The authors find that insurers do not place equal weights or values on insurance product attributes and do not view types of insurance equally. In other words, while farmers may hold different preferences about the type of insurance they demand, the results suggest that insurers also hold preferences in the type of insurance they sell.

So far as the authors are aware, this is the first DCE designed around the supply of insurance products with the subjects being insurance agents, marketers and executives.

This paper explored factors that impact insurance choices of demand (farmers) and supply (insurance companies) side, respectively.

Specially designed survey questions allow one to fully observe the demand tendency from farmers and partially observe the supply tendency from insurance companies. Using bi‐vairate probit model, a joint estimation of insurance decisions of both supply and demand sides suggested that factors perform different roles in affecting insurance participation.

Farmer's age and education have positive impacts on insurance demand, but are indifference to insurance providers. Insurance suppliers care about farmers' experience in the fields when providing insurance services, however, on the demand side, farmers' experience occasionally results in overconfidence and hence, impedes farmers' insurance purchasing. Production scales, proxy by sow inventory, are put more weight by farmers than insurance suppliers when making decisions. Production efficiency measures perform as incentives for farmers to purchase insurance. While suppliers prefer customers who use vaccine, farmers tend to treat vaccine as a substitute for insurance to prevent disease risk.

Results from bi‐vairate probit model offer deeper understandings about livestock insurance choices and provide further insights to improve policy design and promote participation.

The study designed a special questionnaire and firstly used bi‐vairate probit model to offer more understandings about demand and supply sides of livestock insurance.

The purpose of this paper is to analyse the association between farm/farmer characteristics and unsubsidized farm insurance premium expenditure in Ireland. The distribution of farm insurance expenditures is wide, and it is important to understand the extent to which individual factors influence demand for different levels of insurance premium.

The quantile regression approach and farm accountancy data from the Teagasc National Farm Survey are used to model the association between farm/farmer characteristics and farm insurance demand in Ireland.

Asset values (livestock, buildings and machinery) are positively associated with total insurance expenditure. Both forestry area and crop area are significantly associated with farm insurance expenditure with a stronger influence on the middle and upper part of the distribution. The interaction between farm income and farmer age is positively associated with insurance expenditure pointing to the importance of farm income protection.

The research is mainly concerned with insuring against substantive risks, which are capable of threatening the asset base and continuation of the farm business. Future research can integrate questions in relation to farm safety and farmer health with research on the economic survival of the farm business.

Farmers in Ireland adopt unsubsidized farm insurance as a risk management tool. This situation is relevant to other EU member states including Belgium, Denmark, Germany and Sweden. The findings can be used to inform stakeholders and policymakers about the relative impact of different factors on insurance expenditure.

Previous research has typically focused on the linear relationship between farm/farmer characteristics and insurance demand without accounting for variability across the size distribution. This research is based on the quantile regression approach where the association between farm/farmer characteristics and farm insurance expenditure can be assessed at different points of the distribution.

Crop insurance and hedging are two risk management strategies used by farmers to manage risk. Using a discrete choice model and farm‐level data, this study investigates the factors influencing farmers’ use of hedging and crop insurance as risk management strategies. In the case of crop insurance, results indicate that level of education, participation in other risk management strategies (such as renting land, commodity programs, spreading sales over the year), and controlling debt are positively related to a farmer’s decision to purchase crop insurance. For the hedging model, results suggest education, off‐farm income, forward contracting sales of crops and livestock, and computer use are positively related to a farmer’s articipation in hedging/futures markets.

The purpose of this paper is to present the methods and findings of an experimental game designed to extend the concept of index‐based livestock insurance in northern Kenya, and analyze patterns of game play. The paper is designed to inform others who may be attempting something similar to this work in other developing country agricultural settings.

The paper presents the following: descriptive context of the issue, explanation of the game design to match the conditions in the area, details of how the authors explained the game, and regression analysis of play by participants.

Games designed to reflect key elements of the local production system can be an effective way of explaining financial products to rural producers in developing countries.

It remains to be seen if the extension effort leads to more informed consumers of insurance products, which the authors hope to address in future work. Also, the approach described in this paper is very labor intensive, which could limit use in a wide ranging extension program.

The authors were able to explain the idea to groups that were mixed: female and male. It will be interesting to see if there are any gender dimensions to insurance use. In addition, with competing claims to livestock with complex property rights, there is a need to monitor how insurance interacts with social ideas of livestock ownership.

This is a completely new idea in the area of arid and semi‐arid livestock production, the challenge is pronounced, and as insurance becomes more important in the development economics toolkit, the authors believe others can benefit from seeing what they have done.

Conceptualizing development in terms of risk management has become a prominent feature of mainstream development discourse. This has led to a convergence between the rubrics of financial inclusion and risk management whereby improved access for poor households to private sector credit, insurance and savings products is represented as a necessary step toward building “resilience.” This convergence, however, is notable for a shallow understanding of the production and distribution of risks. By naturalizing risk as an inevitable product of complex systems, the approach fails to interrogate how risk is produced and displaced unevenly between social groups. Ignoring the structural and relational dimensions of risk production leads to an overly technical approach to risk management that is willfully blind to the intersection of risk and social power. A case study of the promotion of index-based livestock insurance in Mongolia – held as a model for innovative risk management via financial inclusion – is used to indicate the tensions and contradictions of this projected synthesis of development and risk management.

The purpose of this paper is to examine the determinants of a household's social capital in the form of community group participation and empirically analyses the roles that social capital plays in helping rural households rebuild productive assets after shocks.

In this paper, social capital is modelled as a household's intensity of group participation measured by the density and active participation in group activities as well as their multiplicative and additive indices. Instrumental variable methods were used to address the problem of endogeneity associated with social capital.

The results indicate that household characteristics such as age, education level, dependence ratio and years of village residence as well as village-level characteristics such as the village population density are critical determinants of social capital. In addition, social capital measured in form of density of participation in group activities and attendance score as well as multiplicative and additive indices of these have significant positive effects on the household ability to rebuild livestock assets.

The authors realize that several weakness in the approach could compromise the validity of the findings. These weaknesses include: the cross-sectional nature of the data, the omitted variable bias, the endogeneity concerns of social capital and the identification strategy, sample size and the dimensions the authors chose to measure social capital. Future research should explore the factors that can help households to engage more in-group activities.

The findings have important implications for government policy especially in areas of agricultural development and poverty reduction. Specifically, governments should pay close attention to the various social groups as they can serve as important channels to achieve better social economic outcomes, including the accumulation of rural assets, as is the case with livestock assets in rural Uganda.

Many governments in Sub-Saharan Africa are constrained to provide basic public goods to the people. This is due to a combination of limited budgets and lack of good leadership. In such circumstances, the people have to rely on their collective/social effort to take advantage of market opportunities. Such opportunities can be accessed using the existing social structures whose norms and the trust between members permit cooperation.

The study contributes to a small but growing empirical literature on social groups and how they can mediate social economic outcomes especially for rural households. The empirical estimations take into consideration the endogeneity concerns associated with social network capital. The paper will be useful for policy makers and researchers who may have a keen interest in the roles that group activities play in agricultural development and poverty reduction.

The purpose of this paper is to investigate the role that weather shocks can play in the livestock mortality microinsurance take-up when the insured risk has a prevalent covariant component.

The sample consists of 360 rural Ethiopian households. Data were collected in a panel-structure at the end of three agricultural seasons (2011-2013). In the questionnaire, a specific section on insurance was meant to collect information on the farmer’s willingness-to-pay (WTP) for a set of insurance products, including livestock mortality insurance. Two OLS regression models and a quantile regression model were employed to estimate the impact of weather anomalies on the WTP for the insurance product.

The authors find that weather anomalies contribute to changes in the WTP to a large extent. Negative (positive) changes in precipitation (temperature) anomalies can lead to more than a 30 percent reduction in the WTP. This general finding is complemented with the analysis of the conditional distribution of the WTP, which shows that other elements can prevail for low values of the conditional distribution. In this case, the WTP seems to be represented more by the interviewee’s age and basic knowledge of insurance, and village fixed-effects. Basic knowledge of insurance, in particular, can increase WTP by about 60 percent.

This paper has straightforward implications from a policy perspective. It suggests that farmers would prefer an insurance premium that follows the changes in the systemic component. On the contrary, insurance as well as reinsurance companies are usually reluctant to frequently revise their premiums. Financial education programs, farmer-driven design, trust building, and bundling insurance with other financial and non-financial products can increase the value proposition perceived by the farmers. From a marketing perspective, the overall findings suggest that continuous fine-tuning of the contract, transparency, and targeted information campaigns can contribute to increase and stabilize potential customers’ WTP.

To the best of the authors’ knowledge, this is the first paper that considers the impact of weather shocks on the WTP for a livestock mortality insurance product. Livestock is one of the most strategic assets of poor rural households in Africa. This study contributes to the theoretical and empirical literature on the determinants of weather insurance take-up in developing countries and, in particular, the role of spatiotemporal adverse selection and basis risk (e.g. Jensen et al., 2016).

Regional differences in crop insurance uptake have persisted over time. To partly explain this phenomenon, the purpose of this paper is to propose and evaluate a budget constraint (heuristic) effect within the standard expected utility theory (EUT) framework through simulation methods.

Within the EUT framework, a standard simulation model is used to gain insights into farm insurance decisions when a budget constraint is in effect. The budget constraint is modeled as it has been revealed through the data on farmers’ insurance expenditures. In the simulation analysis, certainty equivalent values are used to rank farm options subject to the revealed budget constraint.

A budget constraint effect within the EUT framework stands out in explaining the observed regional differences. The proposed explanation is consistent with the historical trends on the ratio of crop insurance expenditure to expected crop value, higher premium rates in regions with lower crop insurance uptake, and the limited turnout for the 2014 Farm Bill’s supplemental area-based crop insurance products. Farmers’ crop insurance choices are found to be mostly constrained-optimal.

This appears to be the first study taking the revealed preferences approach to farmers’ crop insurance choices in a simulation analysis. Some policy implications are drawn and future research avenues are suggested. The findings should be of considerable value to policymakers, academics, bankers, and producers in regard to the design and use of risk management tools.

Livestock Risk Protection (LRP) insurance can reduce losses from price declines for cattle producers, but LRP adoptions has been limited. In 2019 and 2020, LRP subsidies were increased to lower the cost, but it is unclear how much these changes lowered the cost. The objective of this research was to estimate the impact of the subsidy increase on the cost of LRP for feeder and fed cattle by month and for various insurance period lengths and levels.

The authors collected United States LRP offering data from 2017 to 2021. The authors estimated separate generalized least squares regression for feeder cattle and fed cattle with producer premium as the dependent variable. Independent variables were dummy variables for coverage level, insurance period, month and year as well as dummy variables in commodity years 2019 and 2020 when the LRP subsidy was increased.

The authors found the subsidy increases did reduce the cost of LRP policies for feeder and fed cattle LRP policies. Producer premiums for feeder cattle LRP polices have declined between $1.41 to $1.90 per cwt and $0.95 to $1.56 per cwt for fed cattle LRP policies depending on the coverage level. Results indicate these subsidy increases did lower the LRP premium costs to producers.

Results show policy implications from the subsidy increases and will be informative to producers when exploring the cost of LRP. This study extends the literature by estimating the reduction in subsidy costs while considering total premiums changed.