Income elasticity of demand for agricultural insurance in Poland in 2006–2020
Income elasticity of demand for agricultural insurance in Poland in 2006–2020

Summary/Abstract: Knowledge of income elasticity of demand for individual products is necessary to forecast the volume and structure of demand. The purpose of this article is to estimate the income elasticity of different types of agricultural insurance in Poland and to indicate the consequences for future demand for this insurance. According to the results of the analysis carried out for the years 2000–2020, premium from crop insurance to the greatest extent – compared to other types of agricultural insurance – depends on both GDP and dis- posable income (per farmer’s household or per person in the household). Income elasticity – respectively 3.05 in relation to GDP for compulsory crop insurance and 2.07 for voluntary crop insurance – indicates that these kinds of insurance should be classified as superior goods. Other types of agricultural insurance – farmer’s liability insurance (income elasticity 0.78) and insurance of agricultural buildings (0.65) are normal goods. This means that with an increase in income, ceteris paribus, the share of farmers’ expenditure on crop insurance in the budget allocated by them for the purchase of agricultural insurance will increase.

• Details
• Contents