Date of Original Version
Environmental and Natural Resource Economics
Shallow-loss policies take center-stage in many proposals for the current Farm Bill. We examine the choice of deductible coverage vs. coinsurance to show risk premiums and loss adjustment costs matter little when comparing policies. Thus, policy makers should base decisions more on costs to taxpayers than specific risk management features.
Sproul, T.W., D. Zilberman, and J.C. Cooper. 2013. "Deductibles versus Coinsurance in Shallow-Loss Crop Insurance". Choices. Quarter 3. Available online: http://choicesmagazine.org/choices-magazine/theme-articles/current-issues-in-risk-management-and-us-agricultural-policy/deductibles-versus-coinsurance-in-shallow-loss-crop-insurance