Crop insurance participation rates and asymmetric effects on U.S. Corn and soybean yield risk

Document Type

Article

Publication Date

1-1-2020

Abstract

Copyright 2020 the authors. Crop insurance and its related components, such as premium subsidies, have impacts on farm management decisions, production practices, and output. We use county-level USDA survey data combined with instrumental variables analysis to investigate asymmetric impacts of crop insurance on corn and soybean yield variance. Our results indicate an increase in yield downside risk as crop insurance participation rates increase. We also find an increase in drought susceptibility, likely due to expansion to lower-quality farmland and changes in input use. Increased yield variability could have effects on prices, farm income variability and farmer welfare.

Publication Source (Journal or Book title)

Journal of Agricultural and Resource Economics

First Page

1

Last Page

19

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