Who Is Afraid of Biotic Threats? An Econometric Analysis of Veneto Wine Grape Farmers’ Propensity to Insure

• Main Authors: Laura Onofri, Samuele Trestini, Vasco Boatto
• Format: Article
• Language: English
• Published: MDPI AG 2020-08-01
• Series: Agriculture
• Subjects: risk aversion/propensity; probit with endogenous regressors; maximum likelihood estimation routing; insurance market; missing markets
• Online Access: https://www.mdpi.com/2077-0472/10/8/336
• ISSN: 2077-0472

This paper aims at understanding what affects farmers’ choices to buy insurance against biotic threats. Using a survey-based dataset with 1187 observations on Veneto wine grapes farms, we regress a probit model with endogenous variables with a maximum likelihood (ML) routine. The results corroborate the microeconomic theory according to which risk-adverse individuals are more propense to insure. In our framework, the farmers’ socioeconomic characteristics are treated as endogenous variables, which exist/are predetermined before the choice to insure (or not). This paper discusses the results in a policy perspective.