한국 농작물재해보험 시장에서의 역선택과 도덕적 해이

Adverse Selection and Moral Hazard in the Korean Crop Insurance Market

Crop insurance p lays an important role in stabilizing farm income. Yet previous studies have proved that market failure can occur in the insurance market because of asymmetric information. This paper empirically tested the existence of adverse selection and moral hazard in the crop insurance market , focusing on rice farms in South Korea. We ran pooled logit and tobit regressions for the test of adverse selection, and fixed effect panel regression for the test of moral hazard. The data were obtained from the Korean Farm Household Economy Survey for the years 2008~ 2012. The empirical results indicated that high-risk farms have a larger tendency to buy insurance, and the amount of effort for alleviating damage from natural disaster shrinks when the farm has insurance and the risk premium is large. Therefore, for the sustainable crop insurance market, measures are needed in order to alleviate the problems of adverse selection and moral hazard in crop insurance.