Article
The Effects of Crop Insurance Subsidies and Sodsaver on Land-Use Change
Journal of Agricultural and Resource Economics
Document Type
Article
Disciplines
Publication Version
Published Version
Publication Date
5-1-2016
DOI
10.22004/ag.econ.235189
Abstract
It is well known that insurance market information asymmetry can cause socially excessive cropping of yield-risky land. We show that crop insurance subsidies can cause the same problem absent information failures. Using field-level yield data, we find an inversed U-shaped relationship between crop prices and crop insurance subsidies’ land-use impacts. For seventeen counties in the U.S. Prairie Pothole Region, simulations show that 0.05% to 3.3% (about 2,600 to 157,900 acres) of land under crop insurance would not have been converted from grassland had premium subsidies not existed. Land-use impacts of Sodsaver in the 2014 Farm Act are also quantified.
Copyright Owner
Western Agricultural Economics Association
Copyright Date
2016
Language
en
File Format
application/pdf
Citation Information
Ruiqing Miao, David A. Hennessy and Hongli Feng. "The Effects of Crop Insurance Subsidies and Sodsaver on Land-Use Change" Journal of Agricultural and Resource Economics Vol. 41 Iss. 2 (2016) p. 247 - 265 Available at: http://works.bepress.com/hongli-hennessy/46/
This article is published as Miao, Ruiqing, David A. Hennessy, and Hongli Feng. "The effects of crop insurance subsidies and Sodsaver on land-use change." Journal of Agricultural and Resource Economics 41 (2016): 247-265. doi:10.22004/ag.econ.235189. Posted with permission.