Title: System Risk and the Failure of China's Crop Insurance Market——An Analysis Based on M-V Preference Model
Abstract: System risk plays an important role in the failure of crop insurance market.Under the condition of farmers' and insurance companies' expected utility maximum,we develop an crop insurance market equilibrium model based on the M-V preference function and point out the equilibrium in short agricultural market exists.Based on this model we can see that system risk in agricultural production make the farmer's risk highly correlation and then inhabit the supply of crop insurance,so the crop insurance is failure.Government's premium subsidy increases the demand of crop insurance and help to correct the failure of crop insurance market,but the depth is determined by the size of premium subsidy.The analysis has important implications for the design and management of China's agricultural insurance risk and government premium subsidy.
Publication Year: 2009
Publication Date: 2009-01-01
Language: en
Type: article
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