Studies Conducted at Justus-Liebig-University Giessen on Crop Insurance Recently Reported (Risk Preferences and the Adoption of Subsidised Crop Insurance: Evidence From Lithuania): Agriculture – Crop Insurance

2022 APR 12 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Current study results on Agriculture - Crop Insurance have been published. According to news reporting originating in Giessen, Germany, by NewsRx journalists, research stated, “Crop insurance adoption remains low among small and medium farms - despite financial public support in the form of premium subsidies. A better under-standing of smaller farmers’ insurance decisions and contract attribute preferences is thus needed to en-courage insurance solutions.”

The news reporters obtained a quote from the research from Justus-Liebig-University Giessen, “Moreover, previous re-search has primarily examined risk preferences and insurance adoption among Western European farm-ers, while little is known about insurance markets and risk preferences in Central and Eastern European countries. We contribute to the literature by i) con -trasting the current status of insurance adoption by Lithuanian farmers by farm size, ii) assessing farm-ers’ risk preferences and attitudes towards crop in-surance, and iii) investigating small and medium farmers’ preferences for the characteristics of a new (hypothetical) subsidised multiple peril crop insur-ance (MPCI) product. Therefore, we conduct a socio-economic survey in Lithuania that features a risk preference elicitation task and a discrete choice ex-periment (DCE). Findings show that, on average, sampled farmers are risk-neutral to slightly risk-seeking and that insurance adoption is lowest among smaller farms (<50 hectares). Moreover, insurance adoption was associated with higher risk exposure, higher trust in insurance services, and higher willing-ness to take farming-specific risks on all farms.”

According to the news reporters, the research concluded: “For small and medium farms, the DCE results suggest preference heterogeneity for contract attributes and higher adoption rates when contract design reduces the risks and efforts associated with subsidised insur-ance.”

This research has been peer-reviewed.

For more information on this research see: Risk Preferences and the Adoption of Subsidised Crop Insurance: Evidence From Lithuania. German Journal of Agricultural Economics, 2022;71(1):36-52. German Journal of Agricultural Economics can be contacted at: Deutscher Fachverlag Gmbh, Mainzer Landstrasse 251, 60328 Frankfurt Main, Germany.

Our news correspondents report that additional information may be obtained by contacting Birgit Gassler, Justus-Liebig-University Giessen, Giessen, Germany.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.30430/gjae.2022.0125. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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