Agricultural Economics & Economics

Permanent URI for this communityhttps://scholarworks.montana.edu/handle/1/7

Situated jointly within MSU's College of Agriculture and College of Letters and Sciences, our department offers a unique opportunity for students with diverse interests to learn skills in critical analysis, logical problem solving, data and policy analysis, written and oral communication, business management. We train individuals who will make a big difference in the world by applying solid critical thinking skills. Our award-winning faculty has expertise in a wide variety of fields. We conduct cutting-edge research and teach a myriad of courses.

Browse

Author: search.filters.author.Belasco, Eric J.Subject: search.filters.subject.Economic history

Search Results

Now showing 1 - 2 of 2
  • Thumbnail Image
    Item
    Evaluation of Crop Insurance Yield Guarantees and Producer Welfare with Upward Trending Yields
    (2012-12) Adhikari, Subodh; Knight, T. O.; Belasco, Eric J.
    Actual Production History (APH) yields play a critical role in determining the coverage offered to producers by the Risk Management Agency’s yield-based crop insurance products. Using both county and individual insured unit data, we examine the impact of APH yield trends for Texas cotton and Illinois corn. Our findings indicate that biases due to using simple average APH yields when yields are trending upward reduce the expected indemnity and actuarially fair premium rate. The estimated welfare effect also varies significantly with different commonly used detrending approaches. This study demonstrates that producer welfare can be enhanced through proper treatment of yield trends in crop insurance programs.
  • Thumbnail Image
    Item
    Yield Guarantee Determination and the Producer Welfare Benefits of Crop Insurance
    (2013) Adhikari, Subodh; Knight, T. O.; Belasco, Eric J.
    Farm-level crop insurance guarantees are based on a small sample of historical yields. Two measures enacted by Congress, yield substitution and yield floors, are intended to mitigate the erratic nature of small samples in determining yield guarantees. We examine the impact of small samples and related policy provisions on the producer welfare benefits of individual-level yield insurance. Our findings indicate that sampling variability in Actual Production History (APH) yields has the potential to reduce producer welfare and that the magnitude of this effect differs substantially across crops. The yield substitution and yield floor provisions mitigate the negative impact of sampling error but also bias guarantees upward, increasing government cost of the insurance programs.
Copyright (c) 2002-2022, LYRASIS. All rights reserved.