Some Simulation Results for a Green Insurance Mechanism Report as inadecuate

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This analysis extends previous work on green insurance by proposing a mechanism that offers a stronger adoption incentive and is applicable to heterogeneous populations and non-binary adoption decisions. Endogenous learning about the new technology is incorporated, and empirically calibrated simulation results are presented for the case of reduced-phosphorus dairy diets. Results show that the mechanism has a significant impact on behavior and may incur no net cost for the regulator when an insurance premium is charged. Conditions under which a green payment mechanism may be preferable to green insurance also are discussed.

Keywords: conservation technology adoption ; dairy farming ; endogenous learning ; green insurance ; phosphorus ; risk preferences ; voluntary programs

Subject(s): Environmental Economics and Policy

Issue Date: 2005-04

Publication Type: Journal Article

PURL Identifier: Published in: Journal of Agricultural and Resource Economics, Volume 30, Number 1 Page range: 94-108

Total Pages: 15

Record appears in: Western Agricultural Economics Association > Journal of Agricultural and Resource Economics

Author: Baerenklau, Kenneth A.


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