Role of Panel Analysis in Identifying Asymmetric Information with Optional Unit Provision in Federal Crop Insurance

Saleem Shaik

No 54983, Agribusiness & Applied Economics Report from North Dakota State University, Department of Agribusiness and Applied Economics

Abstract: This paper has a two-fold contribution, first we demonstrate the relationship of spatial, temporal and residual yield risk estimated from a two-way panel random effects model to asymmetric information with an optional unit provision in the federal crop insurance program. Second, the yield risk components are incorporated in a discrete choice model to examine the presence of asymmetric information due to potential yield switching with optional unit provisions. Empirical application to 1998 U.S. cotton crop insurance data reveals the presence of asymmetric information with optional unit provisions.

Keywords: Crop Production/Industries; Demand and Price Analysis (search for similar items in EconPapers)
Pages: 28
Date: 2009-03
New Economics Papers: this item is included in nep-agr, nep-cta and nep-ias
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nddaae:54983

DOI: 10.22004/ag.econ.54983

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