Crop Insurance, Premium Subsidy and Agricultural Output
This paper studied the effects of crop insurance on agricultural output with an economic growth model. Based on Ramsey-Cass-Koopmans (RCK) model, a basic model of agriculture economic growth was developed. Extending the basic model to incorporate uncertainty and insurance mechanism, a risk model and...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
KeAi Communications Co., Ltd.
2014-11-01
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| Series: | Journal of Integrative Agriculture |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2095311913606747 |
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| Summary: | This paper studied the effects of crop insurance on agricultural output with an economic growth model. Based on Ramsey-Cass-Koopmans (RCK) model, a basic model of agriculture economic growth was developed. Extending the basic model to incorporate uncertainty and insurance mechanism, a risk model and a risk-insurance model were built to study the influences of risk and crop insurance on agricultural output. Compared with the steady states of the three models, the following results are achieved: (i) agricultural output decreases if we introduce uncertainty into the risk-free model; (ii) crop insurance promotes agriculture economic growth if insurance mechanism is introduced into the risk model; (iii) premium subsidy constantly improves agricultural output. Our contribution is that we studied the effects of crop insurance and premium subsidy from the perspective of economic growth in a dynamic framework, and proved the output promotion of crop insurance theoretically. |
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| ISSN: | 2095-3119 |