Studying farm insurance demand under financial constraints

Arbeitspapier

We hypothesize a reciprocal causation between crop insurance use and the economic performance of farms in an environment characterized by imperfect financial markets and farms' budget constraints. To test our hypothesis, we apply a system of simultaneous equations consisting of economic performance and insurance demand models to the case study of Hungarian cropping farms. In addition, considering that insured farms may have better access to external finance, we seek empirical evidence confirming a potential positive effect of crop insurance on the economic performance of financially constrained farms. Our study results indeed confirm the reciprocal causation hypothesis.

Object Details

• ISBN: 978-615-5594-63-2
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IEHAS Discussion Papers ; No. MT-DP - 2016/25

Classification and Topics

• Classification: Wirtschaft ; Insurance; Insurance Companies; Actuarial Studies ; Firm Performance: Size, Diversification, and Scope ; Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets ; Agricultural Finance
• Subject: crop insurance demand ; farm productivity ; financial constraints ; farm investment ; Hungarian agriculture

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Baráth, Lajos ; Bokusheva, Raushan ; Fertő, Imre
• Event: Veröffentlichung
• (who): Hungarian Academy of Sciences, Institute of Economics
• (where): Budapest
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/190449
• Last update: 10.03.2025, 11:42 AM CET