Demand for Farm Insurance Under Financial Constraints. Issue 4 (4th July 2017)

• Record Type: Journal Article
• Authors: Baráth, Lajos; Bokusheva, Raushan; Fertő, Imre
• Is Part Of: Eastern European economics. Volume 55:Issue 4(2017)
• Page Start: 357
• Page End: 376
• Publication Date: 2017-07-04
• Subjects: crop insurance demand -- farm investment -- farm productivity -- financial constraints -- Hungarian agriculture; G22 -- L25 -- Q12 -- Q14; Europe, Eastern -- Economic conditions -- Periodicals; 330.947
• DOI: 10.1080/00128775.2017.1294986
• Languages: English
• ISSNs: 0012-8775

Abstract

Abstract : This article investigates the effect of the use of crop insurance on farms' economic performance. The authors hypothesize the existence of reciprocal causation between crop insurance use and the economic performance of farms in an environment characterized by imperfect financial markets and farm budget constraints. The results confirm the reciprocal causation hypothesis. Economic performance is found to positively influence farms' demand for insurance, confirming the significance of budget constraints. Moreover, insurance is found to have a negative effect on Hungarian farms' economic performance, implying that the crop insurance system is inefficient.