Determination of Effective Factors on Adoption of Livestock Insurance in Kerman with Parametric and Nonparametric Methods

Livestock subsector like other agricultural activities are faced with risk in production and marketing. Insurance is one of the most prevalent methods in risk management. It is important to know, how target groups react to this protective system. This article aims to determine and assess the factors which affect adoption of insurance by ranchers in Kerman province. For this purpose, 114 ranchers were selected randomly and were interviewed. First, the effective factors on rancher's behavior were determined by Artificial Neural Networks, and then marginal effects of the variables were estimated by Logit model. Output of artificial neural networks indicated that type of ranch, education level, experience, number of livestock, age, off-farm activities and previous year revenue were factors affecting on ranchers, behavior. Results of Logit estimation indicated that the effect of education level, experience, number of livestock had positive and type of ranch, age, off-farm activities and previous year revenue had negative effects on insurance adoption by ranchers