The concept of “demand” and its derivatives in the modern scientific insurance discourse

In the scientific literature concepts such concepts as “demand for insurance”, “demand for insurance services”, “insurance demand”, “demand for insurance products”, etc. are often used. While being simple in their intuitive reading, they are in fact not as unambiguous as they may seem at first glance. Since there is a semantic conditionality of the meaning of a derived word by the values of its components and they are also not always well-established, then terminological uncertainty arises. The negative effect is enhanced by the permissible mixing of concepts with each other or the creation of scholastic multivariability. Quite often, the definition of demand as a category is given a characteristic of the level of demand, and without taking into account its dimension and type. Moreover, there are defects in the choice of definitions and the construction of definitions, the dominance of recursive definitions that have no value for the full disclosure of the meaning and content of the defined. The author concludes about the inadmissibility of taking liberties in the interpretation of significant concepts and terms, careful construction of new turns with their participation. The problem of using concepts without giving meaning to their scientific content is posed.

The effects of overconfident yield forecasting on cross-coverage level crop insurance demand

PurposeThis paper examines the effect of overconfident yield forecasting (optimism bias) on crop insurance coverage level choices across both yield and revenue insurance.Design/methodology/approachThis study simulates a representative producer’s preferred coverage level for both yield and revenue insurance under three potential models of decision-making and four potential manifestations of overconfident yield forecasting. The study then uses this framework to examine how coverage level choices change as overconfidence increases (decreases).FindingsAs overconfidence increases, producers prefer lower levels of crop insurance coverage than they would otherwise prefer, with extreme overconfidence inducing farmers to buy no insurance at all. While overconfidence affects cross-coverage demand for revenue and yield insurance similarly, this effect is more pronounced for yield insurance. Cross-coverage level demand for revenue insurance is relatively stable across changes in the correlation between prices and yields.Practical implicationsThis research has important implications for crop insurance subsidy design and crop insurance demand modeling.Originality/valueThere is a growing body of literature suggesting that producers are overconfident with regard to their future yield risk and that this bias reduces their willingness to pay for risk management tools such as crop insurance. This is the first study to look at how such overconfidence affects cross-coverage level demand for crop insurance.