For the VaR0.10 measure, the
reduction in risk is not sufficient to offset the leftward shift in
the central tendency of the revenue distribution caused by the
10% premium load. Similarly, for the MV measure when the producer is not very risk averse (k = 0.1), the risk reduction
generated by the index insurance (given the high basis risk) did
not increase well-being enough to offset the decrease in wellbeing
associated with having to pay the 10% premium load.