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Communication Dans Un Congrès Année : 2014

The impact of farmers’ risk preferences on the design of an individual yield crop insurance

Résumé

Kahneman and Tversky’s Cumulative Prospect Theory (CPT) has proved to be better suited for representing risk preferences than von Neumann and Morgenstern’s Expected Utility Theory (EUT). We argue that neglecting this may explain to some extent why farmers do not contract crop insurance as much as they are expected to. We model the decision to contract an individual yield crop insurance for a sample of 186 French farmers. We show that 21% of the farmers who would be expected to contract assuming that their preferences are EUT, would actually not do so if their true preferences are in fact CPT.
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Dates et versions

hal-01209035 , version 1 (05-06-2020)

Identifiants

  • HAL Id : hal-01209035 , version 1
  • PRODINRA : 282704

Citer

Douadia Bougherara, Laurent Piet. The impact of farmers’ risk preferences on the design of an individual yield crop insurance. 14. EAAE Congress "Agri-Food and Rural Innovations for Healthier Societies", European Association of Agricultural Economists (EAAE). INT.; Société Française d'Economie Rurale (SFER). FRA., Aug 2014, Ljubjana, Slovenia. 20 p. ⟨hal-01209035⟩
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