Preferences for crop insurance when farmers are diversified

The government intends to rely on an insurance-based solution to yield risk. Therefore, it is important to identify which characteristics most affect a grower's decision regarding whether or not to use crop insurance. This case study uses California cross-sectional survey data to directly compare the relative effects of three types of characteristics that are expected to influence insurance preferences. In general, results from the model estimated indicate that preferences for crop insurance are a function of the commodities produced and the risk environment faced by individual growers.