Aggregation in area-yield crop insurance: The linear additive model

Bharat Ramaswami; Terry L. Roe

doi:10.1111/j.0092-5853.2004.00588.x

Aggregation in area-yield crop insurance: The linear additive model

Bharat Ramaswami, Terry L. Roe

Applied Economics

Research output: Contribution to journal › Article › peer-review

8 Scopus citations

Abstract

Previous analyses of area yield crop insurance have used a linear additive model (LAM) to express the relationship between individual and area yield. However, the theoretical foundations of the LAM are unknown. This shortcoming is addressed by establishing two conditions linking microvariables and LAM parameters. The conditions relate to the interaction of risks in individual technologies and the extent of aggregation. If systemic and individual risks are additive in individual yields, and if the law of large numbers hold, then the LAM obtains. This article also shows how departures from these conditions affect the results derived from a LAM analysis.

Original language	English (US)
Pages (from-to)	420-431
Number of pages	12
Journal	American Journal of Agricultural Economics
Volume	86
Issue number	2
DOIs	https://doi.org/10.1111/j.0092-5853.2004.00588.x
State	Published - May 2004

Keywords

Area yield
Beta
Crop insurance
Systemic risks

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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Aggregation in area-yield crop insurance: The linear additive model

Abstract

Keywords

UN SDGs

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