Determining the best option of pistachio supplemental insurance contract in Rafsanjan District: Application of stochastic dominance criteria

Document Type : Research Paper

Authors

1 PhD. Student, Agricultural Economics, University of Shiraz, Iran

2 Professor, Agricultural Economics, University of Shiraz, Iran

Abstract

An important feature of agriculture is the high level of production, market and financial risks faced by farmers. There are different policies, programs and measures that contribute to the reduction of these risks. The farmers prefer programs that reduce the income risk and increase the income level. Crop insurance is one of the best these programs. The purpose is to determine the best option of Pistachio supplemental insurance from the perspective of Pistachio Growers in Rafsanjan district. Therefore, net income per hectar for different options was simulated and the best option was determined according to stochastic dominance criteria. Six years data of price, yield, production cost per hectar, premium and compensation per hectar were used for this analysis. The results showed that three options of Pistachio supplemental insurance exhibited first degree stochastic dominance over the refusal of insurance and results of stochastic dominance with respect to a function indicated that for risk aversion less Pistachio Growers, the third option but at risk aversion greater, the second option is the best option.

Keywords

References

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Iranian Journal of Agricultural Economics and Development Research
Volume 46, Issue 3 - Serial Number 3
October 2015
Pages 569-577

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