Crop Insurance Participation Rates and Asymmetric Effects on U.S. Corn and Soybean Yield Risk

Lawson Connor and Ani Katchova

Journal of Agricultural and Resource Economics, 2020, vol. 45, issue 01

Abstract: 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.

Keywords: Risk and Uncertainty; Crop Production/Industries (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:jlaare:298431

DOI: 10.22004/ag.econ.298431

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