Area Yield Index Insurance or Farm Yield Crop Insurance? Chinese Perspectives on Farmers' Welfare and Government Subsidy Effectiveness
利用中国农场层面产量数据，比较区域产量指数保险与农场产量作物保险对农民福利的影响及政府补贴的成本效益，发现区域保险并非总是更优，决策需考虑当地条件。
Abstract We evaluate the performance of area yield crop insurance ( AYCI ) and farm yield crop insurance ( FYCI ) using farm‐level yield data from China, focusing on their effects on farmers' welfare, and their cost‐effectiveness in terms of government subsidy. Given a subsidy rate sufficient to generate a politically acceptable participation level, the price advantage of AYCI may no longer offset its higher basis risk, and consequently FYCI may be preferred by farmers. From the government's perspective, AYCI is the cheapest option to maintain reasonable farmer participation in insurance, but is not necessarily the most cost‐effective choice. Our findings suggest that, contrary to an assumption that informs many developing country agricultural insurance programmes, AYCI schemes are not necessarily preferred to FYCI . Decisions on the structure of a national agricultural insurance programme should be based on careful consideration of local conditions.