Article
Using a Farmer's Beta for Improved Estimation of Expected Yields
Journal of Agricultural and Resource Economics
Document Type
Article
Disciplines
Publication Version
Published Version
Publication Date
4-1-2008
Abstract
Effects of sampling error in estimation of farmers' mean yields for crop insurance purposes and their implications for actuarial soundness are explored using farm- level corn yield data in Iowa. Results indicate that sampling error, combined with nonlinearities in the indemnity function, leads to empirically estimated insurance rates that exceed actuarially fair values. The difference depends on the coverage level, the number of observations used, and the participation strategy followed by farmers. A new estimator for mean yields based on the decomposition of farm yields into systemic and idiosyncratic components is proposed, which could lead to improved rate-making and reduce adverse s
Copyright Owner
Western Agricultural Economics Association
Copyright Date
2008
Language
en
File Format
application/pdf
Citation Information
Miguel A. Carriquiry, Bruce Babcock and Chad E. Hart. "Using a Farmer's Beta for Improved Estimation of Expected Yields" Journal of Agricultural and Resource Economics Vol. 33 Iss. 1 (2008) p. 52 - 68 Available at: http://works.bepress.com/chad-hart/156/
This is an article from Journal of Agricultural and Resource Economics, 33(1) April 2008, 52-68. Posted with permission.