Herriges, Joseph A.; Feinerman, Eli; Holtkamp, Derald

Review of Agricultural Economics Vol. 14 no. 2 (1992): 169-186.

Crop insurance provides a potential tool for reducing agricultural chemical use by providing a substitute for the risk management benefits of pesticides. This article describes the results obtained from an integrated modeling system developed to assess the efficacy of crop insurance used in this manner. While crop insurance is found to reduce pesticide application, the extent of its impact depends significantly upon the distribution of risk aversion in the target population and the reductions can be costly, ranging from $25 to $45 per pound of active ingredient.