The Yeoman's Portfolio: Measuring Historical Risk Preferences Using Crop Choice

Remy Levin and Daniela Vidart

No 35634, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We design a method for measuring the risk preferences of agents in the deep past. The method combines a structural model of crop choice as a portfolio allocation with machine-learning prediction of expected crop returns, using historic agronomic and climate data. We estimate county-level risk preferences for the United States and farmer-level preferences in Kansas from 1889 to 1929. More risk averse farmers leveraged less, were less likely to purchase novel WWI Liberty Bonds, and were more likely to participate in local risk-sharing institutions. We show that higher risk aversion predicts slower tractor adoption and farm mechanization during the 1920s.

JEL-codes: D81 G11 N51 N52 O13 Q12 Z10 (search for similar items in EconPapers)
Date: 2026-08
New Economics Papers: this item is included in nep-his and nep-upt
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