Risk Management Effects of Insurance Purchase and Organization Participation: Which Is More Effective?
Round 1
Reviewer 1 Report
Thank you for the opportunity review the paper entitled "Risk management effects of insurance purchase and organization participation: Which is more effective?". The paper aims to assess effect of insurance, organizational participation and both on farm revenue and its higher-order moments based on the panel data of China Land Economic Survey. Multinomial switching endogenous regression is adopted to deal with the self-selection bias and endogeneity. The paper is nicely written and warrants publication in the journal. However, I believe that the comments below will help to enrich the paper and add value.
1. A bit of background on theoretical underpinning in technology adoption (insurance, organization participation, and both) and the possible pathway contributing to increase revenue, specially, will provide the justification for the selection of independent variables of first stage regression.
2. Unbalanced panel - This paper relies on unbalanced panel. It is important to state strength of panel data and possible weakness of using the unbalanced panel data. Moreover, the time dimension of the panel data is not well reflected in the equations. I am afraid if authors missed that important dimension of panel data, and simply treating the data of different years as a cross-sectional data.
3. Consistency in the use of notations in equations 1 and 3, for instance j and J, notations for revenue, and others
4. Cadre households and information services were selected as instrumental variables. A brief explanation on justification for selecting them as instrument variables is warranted. It is also important to establish how these two variables meet the requirements to use them as independent variables such as relevance conditions, exclusion restriction (briefly mentioned in line 169-171, and 172-176 needs reconsideration though), and exogeneity.
5. What could be the reason for decline in insurance?
6. I suggest to merge Table 3 and Figure 2.
7. Which result is related with discussion made in Line 324 -329 ('Various institutes often provide... the organizations)? Author(s) might have tried to relate that with Technology 1 and 2 in Table 2, however these two variables are not reported in the explanation for Table 2 in Section 3.2.
8. Discussion - Section 4.2 looks more like reporting of the finding in Table 3. It is recommended to enrich the discussion with more evidence and possible implication in the specific context. For instance, the mechanism how insurance, or participation in organization or both insurance and participation contribute to increase in revenue, decrease in revenue variance and increase in skewness needs to be discussed. Such contribution could be context specific. For instance what are the organizations existing in the study areas, and how are they helping farmers to increase revenue and skewness or decrease the variance. The Implication of the findings should also be discussed under the discussion section.
9. Conclusion - Rather than just summarizing four important findings of the study, I suggest authors to draw some implications of such finding and draw conclusion, which helps authors to draw some policy suggestion/recommendation.
Best wishes
I believe the quality of English is good enough. Minor checking will help though.
Author Response
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Author Response File: 
Author Response.docx
Reviewer 2 Report
Dear authors! The study has significant practical value in identifying the main focus groups of agricultural insurance in the Chinese context. The research was carried out with high quality, an adequate set of statistical data processing methods, and a large number of literature sources were used.
However, there are a number of comments that would increase the validity of these conclusions.
The first is the effectiveness of agricultural insurance in China. The provided data on insurance premiums, the amount of state support, compensation paid and the loss rate of agricultural insurance over a number of years would clearly demonstrate the effectiveness of insurance as a risk reduction tool.
Secondly, the entry as one of the parameters of the model of membership in the Communist Party is not clear. It is advisable to describe this group of household heads from the point of view of an economic entity.
In general, the work was completed with high quality and can be published taking into account these comments.
Author Response
Please see the attachment.
Author Response File: Author Response.docx
