A TWO-STAGE MODEL OF THE DEMAND FOR SPECIALTY CROP INSURANCE

Abstract

Legislators are considering raising catastrophic (CAT 50% coverage) crop insurance premiums. However, estimates of a two-stage coverage-choice and participation model using county-level data from California grape growers show that the demand for CAT insurance is price-elastic, therefore, premium increases will worsen the financial performance of the grape-insurance program.crop insurance, discrete / continuous choice, grapes, multinomial logit, Research Methods/ Statistical Methods, Risk and Uncertainty,