Roderick M. Rejesus, Barry K. Goodwin, Keith H. Coble and Thomas O. Knight
This article seeks to examine the reference yield calculation method used in crop insurance rating and provides recommendations that could potentially improve actuarial…
Abstract
Purpose
This article seeks to examine the reference yield calculation method used in crop insurance rating and provides recommendations that could potentially improve actuarial performance of the Federal crop insurance program.
Design/methodology/approach
Conceptual, numerical, and statistical analysis is utilized to evaluate the reference yield calculation method used in the US Federal crop insurance program.
Findings
The results suggest that reference yields, which at the time of this study are calculated using National Agricultural Statistics Service (NASS) data, do not accurately represent the average actual yields of the insured pool of producers in the Federal crop insurance program. In addition, it is found that not regularly updating these NASS‐based reference yields exacerbates this problem because these reference yields do not appropriately represent the current state of technological progress.
Practical implications
The empirical analysis leads this paper to recommend a reference yield calculation procedure that utilizes county‐average yields from the risk management agency (RMA) participation database and an approach that uses spatially aggregated average yields in cases when data for a particular county are sparse.
Originality/value
No previous study has investigated the reference yield calculation method in the Federal crop insurance program using both RMA and NASS data sets. Moreover, this study contributes to the small literature that examines various aspects of the actual production history (APH) rating platform and suggests refinements to improve actuarial performance.
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Keith H. Coble, Thomas O. Knight, Mary Frances Miller, Barry J. Goodwin, Roderick M. Rejesus and Ryan Boyles
The purpose of this research is to investigate the degree to which trends and structural change may have altered crop insurance expected loss cost ratios across time. Because loss…
Abstract
Purpose
The purpose of this research is to investigate the degree to which trends and structural change may have altered crop insurance expected loss cost ratios across time. Because loss experience is used to set rates for the program, these changes can impact the premiums paid by producers and cost to the government.
Design/methodology/approach
County level adjusted loss cost data was merged with climate division weather data for the 1980‐2009 period. Crop‐specific regional‐level regression models were estimated to test for trends and structural changes in the loss experience for major crops (corn, soybeans, sorghum, cotton, winter wheat, and spring wheat). Climate data was used to control for the effect of weather.
Findings
For several crops and regions, a significant break point in the loss cost data is found at 1995. This is consistent with the policy changes that occurred in in the program due to the 1994 legislative change. In most instances loss experience prior to 1995 is higher than more recent years even when controlling for the effect of weather. The exception is in winter wheat where it appears recent experience may be worse rather than older experience.
Originality/value
This paper provides a large‐scale assessment of the magnitude of improved crop insurance loss experience across time.
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Julia I. Borman, Barry K. Goodwin, Keith H. Coble, Thomas O. Knight and Rod Rejesus
The purpose of this paper is to be an academic inquiry into rating issues confronted by the US Federal Crop Insurance program stemming from changes in participation rates as well…
Abstract
Purpose
The purpose of this paper is to be an academic inquiry into rating issues confronted by the US Federal Crop Insurance program stemming from changes in participation rates as well as the weighting of data to reflect longer‐run weather patterns.
Design/methodology/approach
The authors investigate two specific approaches that differ from those adopted by the Risk Management Agency, building upon standard maximum likelihood and Bayesian estimation techniques that consider parametric densities for the loss‐cost ratio.
Findings
Both approaches indicate that incorporating weights into the priors for Bayesian estimation can inform the distribution.
Originality/value
In most cases, the authors' results indicate that including weighting into priors for Bayesian estimation implied lower premium rates than found using standard methods.
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Shyam Adhikari, Eric J. Belasco and Thomas O. Knight
The purpose of this paper is to examine the spatial components of producer heterogeneity in crop insurance product selection among US corn producers and identifies neighborhood…
Abstract
Purpose
The purpose of this paper is to examine the spatial components of producer heterogeneity in crop insurance product selection among US corn producers and identifies neighborhood spillover or agent marketing effects in these decisions.
Design/methodology/approach
County‐level insurance and yield data are used to demonstrate that a gradual shift from yield‐based insurance to revenue‐based insurance has spatial patterns. Conventional risk variables such as yield variability, price variability, prevalence of irrigation, other crops, and yield‐price relationships play an important role in this shift and are consistently estimated only when spatial components are included. A spatial random effects model is used to also identify the impact of spatial lag effects, which include neighborhood spillover and agent marketing effects, on the share of corn acres insured with revenue‐based plans vs yield‐based plans.
Findings
Theoretically consistent variables associated with risk are found to significantly influence the choice between crop revenue and yield insurance. Non‐linear parameters identify the region‐specific effects from changes in irrigation, yield price correlation, and the prevalence of corn production on insurance decisions. In addition, spatial components such as the decisions made by nearby producers and marketing drives are also found to influence decisions. These results may demonstrate the relative influence of trusted sources, such as nearby producers and insurance agents, on insurance decisions.
Originality/value
Traditional risk variables are consistently estimated by controlling for spatial heterogeneity. This study also reveals the propensity of producers to rely on the opinions of other producers or agents that they know.
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Dale L. Flesher, William D. Samson and Gary John Previts
Evidence of audit committee activity in the formative years of the Baltimore & Ohio (B&O) Railroad indicates that control and reporting activity developed long before the…
Abstract
Evidence of audit committee activity in the formative years of the Baltimore & Ohio (B&O) Railroad indicates that control and reporting activity developed long before the existence of regulatory mandate or the external auditing function. This is the earliest example of such an organized and continuing activity in American business history. With no previous business experience to model this enterprise, the organizers of the corporation put in place an audit committee of directors as a control device to safeguard assets and ensure proper handling of cash receipts and disbursements. Research into primary materials establishes that the committee not only performed regular routine audits of the “treasurer’s report,” but also identified and addressed critical problems of control and payment weaknesses. The discovery of the function of value‐for‐money (VFM) auditing by a committee of directors establishes historical context for today’s audit process and audit committee. Because the B&O was such an important entity, it influenced other railroads; and the railroad industry, in turn, greatly influenced the development of modern American businesses during the Industrial Revolution.
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Julia Brannen, Rebecca O’Connell and Kia Ditlevsen
This chapter contributes to the literature on domestic food provisioning and food insecurity in contemporary Europe, focusing on lone-parent households living with a disability or…
Abstract
This chapter contributes to the literature on domestic food provisioning and food insecurity in contemporary Europe, focusing on lone-parent households living with a disability or long-term health condition, either of a parent and/or a child, in the United Kingdom and Denmark. Taking a comparative case approach, it examines parents' strategies to achieve food security through practices of ‘domestic food provisioning’ that draw on resources within and outside the household. Taking account of the multiple layers of context in which provisioning practices are embedded, this chapter identifies factors or mechanisms that enhance or reduce food security for families living with a disability or long-term health condition. At the micro-level of food preparation, these families experience challenges including cooking and requirements for labour-saving equipment, providing meals that meet the needs of selective eaters (often children), the need to rely on their children's help and for outsourced domestic labour through buying ready-made foods. At the meso-level of procurement and ‘physical access’ to shops, transport is crucial, with households experiencing differences in service provision. At the macro-level of national welfare systems and ‘economic access’ to food, this chapter points to evidence that Britain provides insufficient financial provision for those with a disability or long-term health condition compared with Denmark, differences reflected in the depth and rates of poverty and food insecurity between these countries. However, as the cases in both countries demonstrate, welfare benefits provide insufficient financial resources to access adequate nutritious food or meet customary norms.
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Aarhus Kommunes Biblioteker (Teknisk Bibliotek), Ingerslevs Plads 7, Aarhus, Denmark. Representative: V. NEDERGAARD PEDERSEN (Librarian).
Michelle Li, Diandian Ma and Tom Scott
New Zealand reintroduced titular honours (i.e. knighthoods and damehoods) in 2009. We document the prevalence of knights and dames on the board of directors.
Abstract
Purpose
New Zealand reintroduced titular honours (i.e. knighthoods and damehoods) in 2009. We document the prevalence of knights and dames on the board of directors.
Design/methodology/approach
We use a probit regression to investigate what firm characteristics are significantly associated with having a knight or dame on the board of directors.
Findings
We find 19 of 112 companies have a knight or dame on the board. These companies are bigger and have larger and more independent boards than other companies. We also find a knight or dame is more likely to serve in companies that have higher dividend yields.
Research limitations/implications
The generalisability of our results is limited by the small number of knights and dames on the boards of listed companies and our archival regression approach. Although we document an association, we cannot prove causation.
Originality/value
We show that directors with greater and easily visible reputational capital are more likely to supply their services to companies that mitigate risks to their reputation and protect minority shareholder interests.
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Born global firms undertake international business at or near their founding. In general, they are a type of highly international small and medium-sized enterprise. In the past…
Abstract
Born global firms undertake international business at or near their founding. In general, they are a type of highly international small and medium-sized enterprise. In the past two decades, born globals have emerged in substantial numbers worldwide, in conjunction with evolutionary trends in globalization and advanced information and communications technologies. In this paper, I summarize extant literature on born globals. I also address their role in the emergent field of international entrepreneurship and the linkage to national competitive advantage. Finally, I suggest numerous research directions on born globals, especially in the context of emerging markets.