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The purpose of this paper is to empirically examine the financial outcomes from forage production and RI-PRF insurance interval for two locations in Nebraska. Both locations provide historical forage production and precipitation data, allowing the authors to examine the relation between RI-PRF net income and forage production.

The authors focus on evaluating the producer net income and risk (measured as variance of net income) by examining the relation between farm precipitation and production and comparing multiple insurance intervals to no insurance. Each insurance interval will likely have a different relation (basis risk) between observed production and return from insurance and, therefore, a different impact on the variance of net incomes. The impact on variance of net incomes identifies the risk-reducing aspects of RI-PRF insurance intervals. The authors then rank each scenario into four mutually exclusive zones that describe the risk-reducing effectiveness and whether the subsidy is working correctly.

The authors found both risk increasing and decreasing insurance intervals exist at both locations. One insurance scenario (low in BBR) provided the highest net income while increasing risk, suggesting a profit maximizing opportunity. RI-PRF reduces net income risk with intervals insuring during high expected precipitation (growing season); while net income risk increases with intervals insuring low expected precipitation (non-growing season, winter months). The farmer would want to insure during the high expected precipitation months, which coincides with the growing season, since RI-PRF lowers the net income risk. For the government, removing net income risk increasing intervals improves the allocation of government resources.

In this paper, the authors modeled the relation between RI-PRF interval selection using the historical forage production data at two locations in Nebraska. The use of historical forage production data allowed the authors to precisely identify the risk-reducing effectiveness of RI-PRF interval selection.

In the 1990s, individuals aged 18–64 were eligible for disability insurance, if their work capacity was reduced by at least 25 percent (50 percent before 1993). In the beginning of the period, before 1991, disability insurance could also be granted for labor market reasons (i.e., if unemployed had been compensated long enough to exhaust their benefits – obtained benefits for 300 days). This possibility was gradually phased out after 1991. In 1995, the enforcement of the rules was tightened. When evaluating applications for disability pensions, local insurance offices now had to request a medical certificate and a work-related test of the applicant's degree of work capacity. Local offices also had to consult the applicant's employer, physician, or other qualified personnel, and even pay personal visits to the applicant. The possibilities for rehabilitating the applicant should also be investigated. From 1997, work incapacity should be evaluated in relation to all possible employment opportunities. Potential income changes resulting from changes in employment should not affect the evaluation⁴ (National Social Insurance Board, 2005).

Contrary to the implications of economic theory, consumption inequality in the United States did not react to the increases in income inequality during the last three decades. This paper investigates if a change in the type of income inequality – from permanent to transitory – or a change in the ability to insure income shocks is responsible for this. A measure of household consumption is imputed into the Panel Study of Income Dynamics to create panel data on income and consumption for the period 1980–2010. The minimum distance investigation of covariance relationships shows that both explanations work together: the share of transitory shocks increases over time, but the capability to insure against permanent and transitory income shocks also improves. Together, these phenomena can explain the lack of an increase in consumption inequality.

This study examined the influence of income and health insurance on the health-seeking behaviour of rural residents, addressing the concerns of endogeneity and heterogeneity bias.

A two-stage residual inclusion was utilised to correct self-selection-based endogeneity problems arising from health insurance membership.

This study provides support for Andersen's behavioural model (ABM). Income and health insurance positively stimulate rural residents' use of modern healthcare services, but the effect of insurance risks a downward bias if treated as exogenous. Further, the effect of health insurance differs between males and females and between adults and the elderly.

This study advances the literature, arguing that, within the ABM framework, enabling (i.e. income and insurance) and predisposing factors (i.e. age and gender) complement each other in explaining rural residents' use of modern health services.

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-03-2023-0223

Participation in micro-family takāful plans amongst low-income earners remains low despite the various initiatives promoted by the Malaysian Government. Therefore, this study aims to conduct an in-depth examination on the indicators of having micro-takaful tafakul in Malaysia.

Questionnaires were distributed to respondents residing in Selangor, the state with the highest recorded percentage of low-income earners in Malaysia. Regression analysis was conducted in this study. Demographic characteristics and knowledge were treated as the independent variables, whereas the tendency of having a micro-family takāful plan was considered the dependent variable.

Gender and knowledge on the benefits of micro-family takāful plans have significant and positive effects on the tendency of having a micro-family takāful plan. Married and employed women are more likely to own a micro-family takāful plan compared with their male counterparts.

This study contributes to the growing literature on the research of micro-takāful determinants in Malaysia.

Industry players and regulators need to tailor the operating and marketing strategies of micro-family takāful plans based on the gender and knowledge of potential participants. The industry may also improve the features of takāful plans to ensure that they are even more attractive and comprehensive.

This study offers a much deeper analysis compared with past research owing to the identified dimensions of a demographic factor that can influence the tendency of having micro-family takāful plans. Besides, this study offers a comprehensive measurement of the knowledge on micro-family takāful plans by considering all aspects (i.e. concept, importance and benefit) of these plans. Moreover, this study examines the influence of each element of knowledge on the tendency of having a micro-family takāful plans, a topic that was rarely studied in the past.

This paper analyzes the effect of dental insurance on utilization of general dentist services by adult US population aged from 25 to 64 years using the ordered probit model with endogenous selection. Our econometric framework accommodates endogeneity of insurance and the ordered nature of the measure of dental utilization. The study finds strong evidence of endogeneity of dental insurance to utilization and identifies interesting patterns of nonlinear dependencies between the dental insurance status and individual's age and income. The calculated average treatment effect supports the claim of adverse selection into the treated (insured) state and indicates a strong positive incentives effect of dental insurance.

Insurance and asset holdings are modeled as the jointly determined outcomes of a constrained optimization problem. Consequently, (1) full coverage may be optimal despite limited premium loading, (2) insurance is normal if insurable assets are normal, (3) insurance cannot be a Giffen good, and (4) insurance is a complement to price‐elastic assets.

Many markets are conceptualized as a stratified low- and middle-income “pyramid” of consumers. Emerging markets are sites of rapid consumer mobility, and thus the middle class there is connected to, and often supports, low-income relatives and employees. Therefore, this paper aims to establish that African income groups are not insular, but rather interrelated and have strong social ties reinforced with longstanding communal values, such as ubuntu.

Using a between-subjects experimental vignette design, the propensity of the middle class to cover low-income individuals on an insurance product was assessed.

Income strata are interrelated and can inform value propositions, which is demonstrated in this paper with insurance, where the middle class are willing to include others, depending on their social proximity, on their insurance cover.

The context for this study was personal home insurance; hence, the generalisability of the results is circumscribed. Other more tangible forms of cover, such as medical, funeral or educational insurance, may engender far stronger effects.

Marketers tend to view low- and middle-income consumers as independent. A view of their interrelation will change the design of many products and services, such as a service catered to the poor but targeted at their support networks. An example of such a service is insurance, which is traditionally hard to sell to the poor. A less atomistic approach to income strata could have implications for vicarious consumption, as well as a reconsideration of the disposable income of both groups.

The pyramid is an interconnected network of social and economic ties.

The purpose of this paper is to examine the relationship between the purchase of insurance and economic growth among agricultural households.

Using survey data of the agricultural sector obtained from China over two years, the authors highlight the effect of job switching between farm and non-farm activities on the demand for insurance by applying the difference-in-differences and triple differences methodologies.

The results show that compared with farm income, non-farm income is associated with an increased (decreased) demand for insurance among households in Eastern (Western) China. The inequality in degree of economic development between the regions plays an important role in this finding. Both education and income exhibit a positive relationship with insurance demand for most regions. In addition, in 2007, regardless of farm or non-farm sector, switches are (except in the northeast region) associated with a significant increase in insurance expenditures. Households who switched from the farm to non-farm sector in 2007 are significantly negatively associated with insurance expenditures in the western region.

Inequalities in the degree of economic development play an important role in insurance consumption.

The authors assess the determinants of insurance market development in the agricultural sector in China, characterized by inter-regional disparities in economic development.

After several reforms of the common agricultural policy, domestic product prices and farm incomes have become more volatile in the EU. Risk-averse farmers are therefore seeking income stabilizing measures. Margin insurance is among the feasible options but is not yet established in the EU. The purpose of this paper is to explore such an insurance under EU conditions for a major crop.

The paper explores conditions for a viable margin insurance. It presents a modeled-loss trigger for a margin insurance scheme using wheat production in Austria as the case study.

While margin insurance products are widely used in the USA, such products are not available in the EU. Basis risk seems to be an important reason. An exploration of wheat production in Austria shows that heterogeneity among farms is relevant. The authors demonstrate an approach aiming to lower basis risks.

This paper presents a technically feasible approach to handle the basis risk of a margin insurance under EU conditions. Before such a product can be placed on the market, further research on systemic risk is needed. Market research is necessary to fine-tune the details of the product to meet the actual demand of farmers. Further empirical validation of the modeled losses is needed. Legal implications are not explored in this paper.

The insurance product presented here demonstrates a concept that is established in the USA under EU conditions. It is motivated by several shortcomings of income risk mitigation approaches in the EU.

Income risk may be seen as a problem of social policy. The approach shows that it can be addressed by market-oriented instruments.

To the authors’ knowledge, this paper is the first to propose a tool to handle basis risk for margin insurance products in agriculture in the EU. A special feature of the proposed approach is that it is not limited to a single product such as wheat.