Relaxing Heteroscedasticity Assumptions in Area‐Yield Crop Insurance Rating
研究了不同异方差假设对区域产量农作物保险费率的影响，发现任意设定异方差或同方差会损害精算合理性，对联邦农作物保险计划有实际意义。
This article focuses on the effect of differing heteroscedasticity assumptions on derived premium rates of area‐yield crop insurance. Tests of the proportional and absolute heteroscedasticity assumptions are conducted using both in‐sample and out‐of‐sample measures. Our results suggest that arbitrarily imposing a specific form of heteroscedasticity or homoscedasticity in insurance rate calculations limits actuarial soundness. Our results have practical implications for the federal crop insurance programs, as we reject the traditional rating assumptions for many cotton regions and lower‐yielding/higher‐risk corn and soybean counties but not in the heart of the Cornbelt.