摘要：The optimal crop revenue insurance contract is designed from recent developments in thetheory of insurance economics under incomplete markets. The message is twofold. Firstly,when the indemnity schedule is contingent on individual price and individual yield, theoptimal contract depends only on the individual gross revenue. Secondly, this policy is shownto fail if the indemnity function is based on aggregate price and/or aggregate yield. A closed-form solution, in which basis risks are ignored, is proposed. It differs from actual revenueinsurance programs proposed to the U.S. farmers. When insurance and capital markets areunbiased, it can be replicated with existing crop yield and revenue insurance policies andhedging contracts if the decision variables are not constrained. The impact of yield and pricebasis risks on the form of the optimal crop revenue insurance contract is examined and aclosed-form solution is derived.
