Economic Research Report No. (ERR-169) 33 pp

July 2014

The Effects of Premium Subsidies on Demand for Crop Insurance

by Erik O'Donoghue

Premium subsidies are a major factor in the current success of the Federal crop insurance program. This study measures the change in crop insurance demand across multiple crops and regions following a legislated increase in subsidies. Findings reveal the influence of premium subsidies on participation in the program.

Keywords: Crop insurance, crop insurance demand, premium subsidies, risk management, Agricultural Risk Protection Act (ARPA)

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