DISTRIBUTIONS OF INDEMNITIES FOR CROP‐INSURANCE PLANS: WITH APPLICATION TO GRAIN CROPS IN NEW SOUTH WALES
A review of crop-insurance schemes is followed by a discussion of a guaranteed-yield, crop-insurance plan. General formulae for the distribution function and mathematical expectation of indemnities for the insurance plan are presented in terms of the distribution of crop yields. Three special cases are considered in which the original yields, the square root of yields, and the logarithm of yields are normally distributed. The insurance plan is applied on a regional basis for wheat and sorghum production in N.S.W. Given distributional information on the crops obtained from a simulation model, expected indemnities are calculated for four different insurance plans.
A NOTE ON VICTORIAN WHEAT YIELD DISTRIBUTIONS
An analysis of wheat yield series from ten localities in Victoria was undertaken to investigate for independence of observations and to test for normality of the distributions. The conclusion was reached that Victorian wheat yield series are composed of random observations and form frequency distributions which display slight negative skewness. The situation may be different for other crops or for wheat in other areas.
Portfolio Selection: The Effects of Uncertain Means, Variances, and Covariances
Present models for selecting portfolios according to the mean-variance criteria do not account for the simultaneous effect of error in estimating means, variances, and covariances of security returns. This paper describes an experiment in which the impact of estimation error is so strong that the usefulness of present mean-variance approaches to portfolio selection is brought into question.