Revenue Insurance and Chemical Input Use Rates
R. Wesley Nimon and
Ashok Mishra ()
No 20669, 2001 Annual meeting, August 5-8, Chicago, IL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)
Using farm level data and a simultaneous probit model we evaluate the input use and environmental effects of revenue insurance. A priori, the moral hazard effect on input use is indeterminate and this study empirically assesses the input use impact of the increasingly popular, and federally subsidized, risk management instrument of revenue insurance. We conclude that the moral hazard effect of federally subsidized revenue insurance products induces U.S. wheat farmers to increase expenditures on pesticides and reduce expenditures on fertilizers.
Keywords: Crop Production/Industries; Risk and Uncertainty (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea01:20669
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