Evaluating the effects of asymmetric information in a model of crop insurance
Abstract
Asymmetric information in the form of moral hazard and adverse selection can result in sizable program costs for government‐provided crop insurance plans. We present a methodology and illustrative simulations to show how these two types of information problems interact in a way to create program costs for the providers of crop insurance. Our methodology allows us to ascertain the relative contributions to program costs of these two sources of asymmetric information. The exercise is useful in pointing out directions for future study seeking ways to improve the design of crop insurance plans.
Keywords
Citation
Esuola, A., Hoy, M., Islam, Z. and Turvey, C.G. (2007), "Evaluating the effects of asymmetric information in a model of crop insurance", Agricultural Finance Review, Vol. 67 No. 2, pp. 341-356. https://doi.org/10.1108/00214660780001212
Publisher
:Emerald Group Publishing Limited
Copyright © 2007, Emerald Group Publishing Limited