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Inquiry into Transaction Theory and Demand for Policy-oriented Agricultural Insurance
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TitleInquiry into Transaction Theory and Demand for Policy-oriented Agricultural Insurance  
AuthorHu Chao,Tao Jianping and Cheng Jing  
OrganizationEconomic and Management College, Huazhong Agriculture University& Hubei Rural Development Research Center; Department of Economic and Management, Hubei Engineering University;; 
Key WordsPolicy-oriented Agricultural Insurance; Transaction Cost; Demand Law 
AbstractBy inheriting Marshall’s theory of demand, this article derives a theory of demand for policy-oriented Agricultural Insurance. The informal risk-sharing arrangements among Chinese farmers have been ignored when the officials promulgated “Agricultural insurance regulations”. We have applied “1993-2006 Hubei Rural Tax and Fee Reform” material to verify the demand theory, and found a significant drop in the costs of informal arrangements. Considering high transaction costs incurred in establishing agricultural insurance system, the decision-maker should return to “economic goods” nature of insurance, while moderately integrate insurance system and the forgotten arrangements. 
Serial NumberWP1144 
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