The impact of yield insurance on Taiwan’s cobia off-shore cage culture

Abstract

In this chapter, we quantified the real effect of yield insurance by setting up hypothetical yield insurance, and simulating its effects on input vector through our statistical model. We conclude three points from our simulations. (1) At 0% coverage, the optimal feed input for low CARA (constant absolute risk aversion) producers and high CARA producers are 56 kg/m3 and 54.75 kg/m3, respectively. The higher the producers' coefficient of risk averse, the lower amount of feed shall be applied. (2) At relatively higher coverage level, no matter which type of risk averse the producers are, the optima! feed application declines with the coverage increases. (3) At different coverage, high CARA producers use less feed and expect lower yield than low CARA producers.