A random-effects, binomial probit model is applied to data for a panel
of Kansas wheat farms to examine Multiple Peril Crop Insurance demand
. A theoretical model is developed which suggests inclusion of the mom
ents of both market return and the return to insurance. Empirical resu
lts indicate that the first and second moments of both market return a
nd the returns to insurance are significant. The price elasticity of d
emand is estimated to be -0.65. Preseason weather variables when inclu
ded in the models were not found to be significant, failing to support
the hypothesis of intertemporal adverse selection.