Title

Systemic risk in U.S. crop reinsurance programs

Campus Units

Economics

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

Spring 2003

Journal or Book Title

Agricultural Finance Review

Volume

63

Issue

1

First Page or Article ID Number

23

Last Page

39

DOI

10.1108/00214980380001139

Abstract

This study develops a method to estimate the probability density function of the Federal Risk Management Agency’s (RMA’s) net income from reinsuring crop insurance for corn, wheat, and soybeans. When calibrated using 1997 data, results from the advocated method show that in 1997 there was a 5% probability RMA would have had to reimburse at least $1 billion to insurance companies, and the fair value of RMA’s insurance services to insurance firms in 1997 was $78.7 million.

Comments

This is a working paper of an article from Agricultural Finance Review, 2003, 63(1); 23-39. DOI: 10.1108/00214980380001139