Bayesian ratemaking procedure of crop insurance contracts with skewed distribution

Over the years, crop insurance programs became the focus of agricultural policy in the USA, Spain, Mexico, and more recently in Brazil. Given the increasing interest in insurance, accurate calculation of the premium rate is of great importance. We address the crop-yield distribution issue and its implications in pricing an insurance contract considering the dynamic structure of the data and incorporating the spatial correlation in the Hierarchical Bayesian framework. Results show that empirical (insurers) rates are higher in low risk areas and lower in high risk areas. Such methodological improvement is primarily important in situations of limited data.

Spatio-temporal modeling of agricultural yield data with an application to pricing crop insurance contracts

This article presents a statistical model of agricultural yield data based on a set of hierarchical Bayesian models that allows joint modeling of temporal and spatial autocorrelation. This method captures a comprehensive range of the various uncertainties involved in predicting crop insurance premium rates as opposed to the more traditional ad hoc, two-stage methods that are typically based on independent estimation and prediction. A panel data set of county-average yield data was analyzed for 290 counties in the State of Parana (Brazil) for the period of 1990 through 2002. Posterior predictive criteria are used to evaluate different model specifications. This article provides substantial improvements in the statistical and actuarial methods often applied to the calculation of insurance premium rates. These improvements are especially relevant to situations where data are limited.

Parametric and nonparametric statistical modelling of crop yield: implications for pricing crop insurance contracts

This article considers alternative methods to calculate the fair premium rate of crop insurance contracts based on county yields. The premium rate was calculated using parametric and nonparametric approaches to estimate the conditional agricultural yield density. These methods were applied to a data set of county yield provided by the Statistical and Geography Brazilian Institute (IBGE), for the period of 1990 through 2002, for soybean, corn and wheat, in the State of Paran. In this article, we propose methodological alternatives to pricing crop insurance contracts resulting in more accurate premium rates in a situation of limited data.

Bimanual aiming and overt attention: one law for two hands

Reaching to interact with an object requires a compromise between the speed of the limb movement and the required end-point accuracy. The time it takes one hand to move to a target in a simple aiming task can be predicted reliably from Fitts' law, which states that movement time is a function of a combined measure of amplitude and accuracy constraints (the index of difficulty, ID). It has been assumed previously that Fitts' law is violated in bimanual aiming movements to targets of unequal ID. We present data from two experiments to show that this assumption is incorrect: if the attention demands of a bimanual aiming task are constant then the movements are well described by a Fitts' law relationship. Movement time therefore depends not only on ID but on other task conditions, which is a basic feature of Fitts' law. In a third experiment we show that eye movements are an important determinant of the attention demands in a bimanual aiming task. The results from the third experiment extend the findings of the first two experiments and show that bimanual aiming often relies on the strategic co-ordination of separate actions into a seamless behaviour. A number of the task specific strategies employed by the adult human nervous system were elucidated in the third experiment. The general strategic pattern observed in the hand trajectories was reflected by the pattern of eye movements recorded during the experiment. The results from all three experiments demonstrate that eye movements must be considered as an important constraint in bimanual aiming tasks.

Popper and his Commentators on the Discovery of Neptune: a close shave for the Law of Gravitation?

Knowledge of residual perturbations in the orbit of Uranus in the early 1840s did not lead to the refutation of Newton's law of gravitation but instead to the discovery of Neptune in 1846. Karl Popper asserts that this case is atypical of science and that the law of gravitation was at least prima facie falsified by these perturbations. I argue that these assertions are the product of a false, a priori methodological position I call, 'Weak Popperian Falsificationism' (WPF). Further, on the evidence the law was not prima facie false and was not generally considered so by astronomers at the time. Many of Popper's commentators (Kuhn, Lakatos, Feyerabend and others) presuppose WPF and their views on this case and its implications for scientific rationality and method suffer from this same defect.