The Feasibility Analysis and Scheme Design of Raw Milk Price Index Insurance in China
Journal Title: Archives of Business Research - Year 2017, Vol 5, Issue 11
Abstract
Dairy producers in China has been suffering from more and more frequently raw milk price fluctuations in recent years. Price Index insurance can be an effective tool of market risk management. We find that there are foreseeable trend, cyclical and seasonal factors in raw milk price fluctuations, and also systematicness in price risk, which make the raw milk price risk uninsurable. But by rationally designing the insurance scheme and institutional innovations, the price risks could become insurable. The choice and construction of milk price index are the core tasks of the scheme design. Income over feed cost could well reflect the actual profitability of milk production and is good to be used as milk price index. To prevent moral hazards and adverse selection, the contract should make stipulations on the coverage level from aspects of production covered and risk retention. We also carry a calculation of actuarially fair premium for the designed insurance contract using distribution approximation and Monte Carlo stimulation.
Authors and Affiliations
Liyu Feng
Keywords
Related Articles
- EP ID EP314248
- DOI 10.14738/abr.511.3855
- Views 80
- Downloads 0
Effect of Brand Communication and Experience on Loyalty: Mediating Effect of Brand Satisfaction and Trust. (Case Study of Customers of Inul Vista Karaoke, Semarang, Central Java, Indonesia)
This study examined the influence of brand communication and experience on brand satisfaction, trust and loyalty. The sample of this study was customer of “Inul Vista Karaoke” in Semarang, Central Java, Indonesia. 220 qu...
Financial Risk Management And Corporate Performance Of Deposit Money Banks In Nigeria
Effective risk management system will minimize the complexities involved in planning, executing and controlling overall running of a business which is critical to success and this maximizes profitability in a business. T...
Linking Entrepreneurship Education With Entrepreneurial Intentions Of Technical University Students In Ghana: A Case Of Accra Technical University
Entrepreneurship education is essential to the development and promotion of entrepreneurial intentions among tertiary students. The aim of this study was to examine the relative importance of entrepreneurship education a...
The Relationship between Servant Leadership, Perceived Organizational Support, Performance, and Turnover among Business to Business Salespeople
The purpose of this study, using a sample of 382 business-to-business salespeople in the United States, was to investigate how servant leadership influences salespersons’ perceived organizational support (POS), outcome p...
“Funds Flow and Performance of Managed Funds in Pakistan”
The main purpose of this study is to examine the mutual fund industry of Pakistan, to examine the assets allocation pattern of mutual funds, how efficiently they are allocated into various assets categories and how inves...