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An empirical analysis of the effect of crop insurance on farmers’ income

An empirical analysis of the effect of crop insurance on farmers’ income Purpose– The purpose of this paper is to assess the effect of crop insurance on farmer income in Inner Mongolia, China. Design/methodology/approach– The authors use a survey of farmers in Inner Mongolia, China, with difference-in-difference (DID), propensity score matching (PSM), and hybrid PSM DID treatment effect estimators to assess the effectiveness of crop insurance on farmer income. Findings– The empirical results show that crop insurance does not significantly affect farmer income under the current policy of “low-premium, wide-coverage, low-guarantee and low-indemnity.” Research limitations/implications– A possible limitation of this study is that the data includes only one geographic area, Inner Mongolia, China, and so results may not generalize to other regions of China. Practical implications– This research provides empirical estimates of the impact of crop insurance on farm household income. Given the results, the authors speculate that a number of specific changes to the crop insurance program might increase its positive impacts. Originality/value– The authors believe this is the first study to use individual farm household level survey data to evaluate the impact of crop insurance on farmer income in China. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png China Agricultural Economic Review Emerald Publishing

An empirical analysis of the effect of crop insurance on farmers’ income

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1756-137X
DOI
10.1108/CAER-05-2014-0045
Publisher site
See Article on Publisher Site

Abstract

Purpose– The purpose of this paper is to assess the effect of crop insurance on farmer income in Inner Mongolia, China. Design/methodology/approach– The authors use a survey of farmers in Inner Mongolia, China, with difference-in-difference (DID), propensity score matching (PSM), and hybrid PSM DID treatment effect estimators to assess the effectiveness of crop insurance on farmer income. Findings– The empirical results show that crop insurance does not significantly affect farmer income under the current policy of “low-premium, wide-coverage, low-guarantee and low-indemnity.” Research limitations/implications– A possible limitation of this study is that the data includes only one geographic area, Inner Mongolia, China, and so results may not generalize to other regions of China. Practical implications– This research provides empirical estimates of the impact of crop insurance on farm household income. Given the results, the authors speculate that a number of specific changes to the crop insurance program might increase its positive impacts. Originality/value– The authors believe this is the first study to use individual farm household level survey data to evaluate the impact of crop insurance on farmer income in China.

Journal

China Agricultural Economic ReviewEmerald Publishing

Published: May 3, 2016

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