The effective design and implementation of interventions that reduce vulnerability and poverty require a solid understanding of underlying poverty dynamics and associated behavioral responses. Stochastic and dynamic benefit streams can make it difficult for the poor to learn the value of such...

Most, if not all, production technologies are stochastic. This article demonstrates how data envelopment analysis (DEA) methods can be adapted to accommodate stochastic elements in a state-contingent setting. Specifically, we show how observations on a random input, not under the control of the...

By altering the probability distribution of farm income, crop insurance programs affect farmer's input use decision. Ramaswami's (1993) one-shock model analyzed the effect of the crop insurance on single input use by allowing the randomness of yield while keeping price constant in revenue...

The vast majority of previous studies on farmers' optimal risk management behavior have used static models and on the most part ignored use of borrowing and lending as an alternative method of managing risk In this paper we develop a stylized multi-period risk management model for a risk averse...

We use the actual insurance records of 52,300 farmers and 11 years to estimate two sets of insurance demands. We define measures of insurance's expected returns, variance and third moment, based on observed insurance data, and infer the expected returns for those farmers that have never had an...

Participation in federal crop insurance programs has been encouraged through premium subsidies. The current subsidy depends on contract features as well as coverage levels. This type of subsidy rule causes farmers to choose contract designs and coverages that are not efficient for managing risk,...

This article compares risk reduction from MPCI and GRP crop insurance contracts. The analysis extends and improves on the existing area-yield insurance literature in four important respects. First, the geographical scope greatly exceeds that of previous work. Second, unlike previous efforts, the...

The Agricultural Risk Management Simulator (ARMS) is a microcomputer program designed to help users evaluate strategies for managing yield and price risk in crop farming operations. Risk management strategies are defined by choices regarding crop mix, the purchase of multiple peril crop...

This article reviews two major approached used in the past for risk analysis—the expected utility approach and the use of safety rules—and endeavors to reconcile their applicability and use in light of the recent nonexpected utility risk literature and working using the mean-Gini...