Does Income Stabilization Tool Outperform Traditional Insurance Contracts in Managing Risk? a Simulation in a Wine Producer Cooperative in Italy

This paper investigates the application of the IST in a winegrowers’ cooperative. It assesses the financial sustainability of the IST and explores farmers’ willingness to adopt it. The present contribution adds to previous analyses by accounting that farmers might choose between: a. participating to the IST; b. subscribing a traditional yield insurance contract; c. not participating in neither of the two. The study shows how the analysis of possible implementation of the IST without accounting for the availability of other tools can yield distorted results and drive to imperfect decisions.