Journal of Rural Development
Estimation and Application of Damage Rates of Crop Insurance Using Spatial Dependency
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AuthorJi, Yeongu
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Publication Date2024.12.20
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Original
The insurance rates for crop insurance that compensate for damage caused by natural disasters are calculated based on the damage rates at city or county level in Korea. When a single natural disaster affects multiple cities or counties simultaneously, the aggregated natural disaster damage rates at the city or county level show similar patterns. In this study, spatial econometric methods that consider the dependency of damage rates between adjacent cities or counties confirms that there is a cross sectional dependency between adjacent cities or counties, and that estimation methods considering this dependency provide better estimates. Based on those results, new methods of estimating the damage rates of each city or county is proposed.
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