Resource Security and Crop Insurance Decision-making: Evidence from the Western U.S

Aadesh Subedi and Aaron Hrozencik

No 404381, 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri from Agricultural and Applied Economics Association

Abstract: This study examines the effect of water right seniority on crop insurance outcomes in the western United States. To achieve this objective, we combine county-level crop insurance data from the USDA Risk Management Agency with individual water-right priority information aggregated to the county level for 353 counties across 13 western states. We estimate fixed effects and random effects models to analyze the relationship between water right seniority and multiple crop insurance outcomes, including total claims, liability, loss ratio, failure-of-irrigation-related losses, and drought-related losses. The results suggest that there are significant differences in insurance outcomes between senior and junior counties. In particular, junior counties tend to have higher claims, liability, failure-ofirrigation losses, and loss ratios, while senior counties tend to have higher drought-related losses. The findings indicate that publicly observable institutional arrangements significantly affect water-related production risk and associated insurance outcomes in the western United States.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Pages: 27
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea26:404381

DOI: 10.22004/ag.econ.404381

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