Picture-based insurance: Is it sustainable? Effects on willingness to pay, adverse selection, and moral hazard
This project note hence describes to what extent picture-based crop insurance is viable from an economic point of view, addressing the following questions: (1) Do farmers strategically reduce crop management efforts (that is, does PBI induce moral hazard) and is there evidence of tampering with pict...
| Autores principales: | , , , , , , |
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| Formato: | Brief |
| Lenguaje: | Inglés |
| Publicado: |
International Food Policy Research Institute
2017
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/10568/148111 |
| Sumario: | This project note hence describes to what extent picture-based crop insurance is viable from an economic point of view, addressing the following questions: (1) Do farmers strategically reduce crop management efforts (that is, does PBI induce moral hazard) and is there evidence of tampering with pictures in order to receive pay-outs when they have PBI coverage? (2) What is farmers’ willingness to pay for PBI compared to willingness to pay for standard weather index-based insurance (WBI)? Is farmers’ demand for PBI strong enough to justify its higher costs? (3) To what extent do farmers se-lectively enroll plots that are more prone to damage? In other words, is PBI prone to adverse selection? |
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