Instruct: Identify the main and secondary category of Arxiv papers based on the titles and abstracts
Query: On the benefits of index insurance in US agriculture: a large-scale
  analysis using satellite data   Index insurance has been promoted as a promising solution for reducing
agricultural risk compared to traditional farm-based insurance. By linking
payouts to a regional factor instead of individual loss, index insurance
reduces monitoring costs, and alleviates the problems of moral hazard and
adverse selection. Despite its theoretical appeal, demand for index insurance
has remained low in many developing countries, triggering a debate on the
causes of the low uptake. Surprisingly, there has been little discussion in
this debate about the experience in the United States. The US is an unique case
as both farm-based and index-based products have been available for more than
two decades. Furthermore, the number of insurance zones is very large, allowing
interesting comparisons over space. As in developing countries, the adoption of
index insurance is rather low -- less than than 5\% of insured acreage. Does
this mean that we should give up on index insurance?
  In this paper, we investigate the low take-up of index insurance in the US
leveraging a field-level dataset for corn and soybean obtained from satellite
predictions. While previous studies were based either on county aggregates or
on relatively small farm-level dataset, our satellite-derived data gives us a
very large number of fields (close to 1.8 million) comprised within a large
number of index zones (600) observed over 20 years. To evaluate the suitability
of index insurance, we run a large-scale simulation comparing the benefits of
both insurance schemes using a new measure of farm-equivalent risk coverage of
index insurance. We make two main contributions. First, we show that in our
simulations, demand for index insurance is unexpectedly high, at about 30\% to
40\% of total demand. This result is robust to relaxing several assumptions of
the model and to using prospect theory instead of expected utility.

22
The categories of this paper are: chao-dyn
2
The categories of this paper are: math
13
The categories of this paper are: quant-ph
15
The categories of this paper are: nucl-ex
32
The categories of this paper are: atom-ph
14
The categories of this paper are: math-ph
20
The categories of this paper are: acc-phys
10
The categories of this paper are: q-bio
19
The categories of this paper are: eess
11
The categories of this paper are: hep-lat
1
The categories of this paper are: cs
33
The categories of this paper are: plasm-ph
24
The categories of this paper are: dg-ga
29
The categories of this paper are: funct-an
25
The categories of this paper are: patt-sol
0
The categories of this paper are: hep-ph