Journal article

Authors list: Gassler, Birgit; Rehermann, Regina

Publication year: 2022

Pages: 36-52

Journal: Agrarwirtschaft

Volume number: 71

Issue number: 1

ISSN: 0002-1121

eISSN: 0515-6866

Open access status: Green

DOI Link: https://doi.org/10.30430/gjae.2022.0125

Publisher: Verlag Alfred Strothe GMBH & Co.

Abstract: 
Crop insurance adoption remains low among small and medium farms - despite financial public support in the form of premium subsidies. A better under-standing of smaller farmers' insurance decisions and contract attribute preferences is thus needed to en-courage insurance solutions. Moreover, previous re-search has primarily examined risk preferences and insurance adoption among Western European farm-ers, while little is known about insurance markets and risk preferences in Central and Eastern European countries. We contribute to the literature by i) con -trasting the current status of insurance adoption by Lithuanian farmers by farm size, ii) assessing farm-ers' risk preferences and attitudes towards crop in-surance, and iii) investigating small and medium farmers' preferences for the characteristics of a new (hypothetical) subsidised multiple peril crop insur-ance (MPCI) product. Therefore, we conduct a socio-economic survey in Lithuania that features a risk preference elicitation task and a discrete choice ex-periment (DCE). Findings show that, on average, sampled farmers are risk-neutral to slightly risk-seeking and that insurance adoption is lowest among smaller farms (<50 hectares). Moreover, insurance adoption was associated with higher risk exposure, higher trust in insurance services, and higher willing-ness to take farming-specific risks on all farms. For small and medium farms, the DCE results suggest preference heterogeneity for contract attributes and higher adoption rates when contract design reduces the risks and efforts associated with subsidised insur-ance.

Harvard Citation style: Gassler, B. and Rehermann, R. (2022) Risk Preferences and the Adoption of Subsidised Crop Insurance: Evidence from Lithuania, Agrarwirtschaft, 71(1), pp. 36-52. https://doi.org/10.30430/gjae.2022.0125

APA Citation style: Gassler, B., & Rehermann, R. (2022). Risk Preferences and the Adoption of Subsidised Crop Insurance: Evidence from Lithuania. Agrarwirtschaft. 71(1), 36-52. https://doi.org/10.30430/gjae.2022.0125