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Insurance Commons

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2003

Finance

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Full-Text Articles in Insurance

Insuring Eggs In Baskets, Chad E. Hart, Dermot J. Hayes, Bruce A. Babcock Jul 2003

Insuring Eggs In Baskets, Chad E. Hart, Dermot J. Hayes, Bruce A. Babcock

CARD Working Papers

The vast majority of crop and revenue insurance policies sold in the United States are single-crop policies that insure against low yields or low revenues for each crop grown on a particular farm. This practice of insuring one crop at a time runs counter to the traditional risk management practice of diversifying across several enterprises to avoid putting all of ones eggs in a single basket. This paper examines the construction of whole-farm crop revenue insurance programs to include livestock. The whole-farm insurance product covers crop revenues from corn and soybeans and livestock revenues from hog production. The results show ...