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Willingness to Pay for Crop Insurance to Adapt Flood Risk by Malaysian Farmers: An Empirical Investigation of Kedah

Author

Listed:
  • Rafia Afroz

    (Department of Economics, Faculty of Economics and Management Science, International Islamic University Malaysia, 50728 Kuala Lumpur, Malaysia)

  • Rulia Akhtar

    (Department of Economics, Faculty of Economics and Management Science, International Islamic University Malaysia, 50728 Kuala Lumpur, Malaysia,)

  • Puteri Farhana

    (Department of Economics, Faculty of Economics and Management Science, International Islamic University Malaysia, 50728 Kuala Lumpur, Malaysia)

Abstract
This study examines the factors that may affect the willingness to pay (WTP) crop insurance by Malaysian rice farmers in Kedah, Malaysia, for the adaptation of flood risk. 350 farm households are selected and a structured questionnaire is used to elicit data from the respondents. The data are analyzed with descriptive statistics and logit regression model. The average WTP for monthly crop insurance premium by the respondents is MYR 48.15 for every RM 1000 coverage/ha/season. The significant variables influencing WTP crop insurance by the farmers are the age of household head, attending the training course, farm income, and experience and farm size. From the findings of this work, it is urged that to promote crop insurance in Malaysia, the government may require a strategic policy to convince the farmers of the credibility and reliability of insurance scheme by improving farmers' awareness and understanding of crop insurance through advertisement and training

Suggested Citation

  • Rafia Afroz & Rulia Akhtar & Puteri Farhana, 2017. "Willingness to Pay for Crop Insurance to Adapt Flood Risk by Malaysian Farmers: An Empirical Investigation of Kedah," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 1-9.
    • Handle: RePEc:eco:journ1:2017-04-01
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    References listed on IDEAS

    as
    1. Sonia Akter & Roy Brouwer & Saria Choudhury & Salina Aziz, 2009. "Is there a commercially viable market for crop insurance in rural Bangladesh?," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 14(3), pages 215-229, March.
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    Cited by:

    1. Yuyun Hidayat & Sukono & Betty Subartini & Nida Khairunnisa & Aceng Sambas & Titi Purwandari, 2022. "An Estimated Analysis of Willingness to Wait Time to Pay Rice Agricultural Insurance Premiums Using Cox’s Proportional Hazards Model," Mathematics, MDPI, vol. 10(21), pages 1-16, October.
    2. Kalfin & Sukono & Sudradjat Supian & Mustafa Mamat, 2022. "Insurance as an Alternative for Sustainable Economic Recovery after Natural Disasters: A Systematic Literature Review," Sustainability, MDPI, vol. 14(7), pages 1-18, April.
    3. K C, Anirudh & K S, Aditya & Padmaja, Subash Surendran & Kuruvila, Anil, 2022. "Paddy farmers in Kerala are willing to pay more for a modified crop insurance product," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 35(1), June.
    4. Rizky Yanuarti & Joni Murti Mulyo Aji & Mohammad Rondhi, 2019. "Risk aversion level influence on farmer's decision to participate in crop insurance: A review," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 65(10), pages 481-489.

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    More about this item

    Keywords

    Willingness to Pay; Contingent Valuation Method; Crop Insurance; Logit Model; Flood Risk;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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