Time-Varying Estimation of Crop Insurance Program in Altering North Dakota Farm Economic Structure

This study examines how federal farm policies, specifically crop insurance, have affected the farm economic structure of North Dakota’s agriculture sector. The system of derived input demand equations is estimated to quantify the changes in North Dakota farmers’ input use when they purchase crop insurance. Further, the cumulative rolling regression technique is applied to capture the varying effects of the farm policies over time. Empirical results from the system of input demand functions indicate that there is no moral hazard since North Dakota farmers will increase fertilizer and pesticide use in the presence of crop insurance. Results also indicate that farmers in this state will not increase the use of land.Farm Management,

INTERTEMPORAL AND INTERSPATIAL VARIABILITY OF CLIMATE CHANGE ON DRYLAND WINTER WHEAT YIELD TRENDS

The importance of climate (temperature and precipitation) variability on Nebraska dryland winter wheat yield trend is examined. The use of short term (1956-1999) climatic divisional panel data (interspatial) and long term (1909-1999) state time series data (intertemporal) is to address the predictability power of estimating the yield trends accounting for climate variability.Resource /Energy Economics and Policy,

AN EXAMINATION OF DIFFERENT TYPES OF ADVERSE SELECTION IN FEDERAL CROP INSURANCE

Different types of adverse selection-type of insurance product, type of unit, type of coverage and number of actual yields reported in Federal crop insurance is examined utilizing binomial and ordered logit discrete choice models for all U.S. cotton producers, 1997-2000. The associated costs of adverse selection in U.S. cotton range from $32 Million to$359 Million for the four-year period.Risk and Uncertainty,

TESTING FOR INPUT AND OUTPUT SEPARABILITY IN NEBRASKA AGRICULTURE SECTOR

The existence of Weak Separability aggregates of inputs and outputs is tested using a Translog production and input requirement function for the Nebraska Agricultural sector for 1936-1994. A separability test was performed only after testing time series properties by comparing the null hypothesis of stationarity against the alternative of unit roots.Research Methods/ Statistical Methods,

Did 1933 New Deal Legislation Contribute to Farm Real Estate: Temporal and Spatial Analysis

The proportions of land values generated by farm program payments and farm returns are examined using an extended income capitalization model. The extended income capitalization model addresses the identification issue introduced by the counter-cyclical nature of farm program payments and farm returns. Procedures are presented that allow the estimation of agriculture land value shares without requiring explicit knowledge or assumptions with respect to the net land rental shares of farm returns or farm program payments. Results from the panel recursive or triangular-structure simultaneous equation model applied to 48 states in the U.S. for the period 1938 to 2006 indicate on average 41-45.6 percent and 54.4-59 percent of the agricultural land values can be identified with farm program payments and farm returns respectively. Spatially, at the resource regional level the contribution of farm program payments was as low as 16.8 percent in Eastern Upland region compared to a high of 51 percent in the Southern Plains region.Farm programs payments, Land values, Extended income capitalization model, Panel recursive/triangular structure simultaneous equation model, Resource regional analysis, U.S. State-level data, 1938-2007., Agricultural Finance, Farm Management,

'Direct and Indirect Shadow Price Estimates of Nitrate Pollution Treated as an Undesirable Output and Input', Journal of Agricultural and Resource Economics Vol. 27, No. 2 (December 2002) pp: 420-432.

The implication of treating environmental pollution as an undesirable output (weak disposability) as well as a normal input (strong disposability) on the direct and indirect shadow price and cost estimates of nitrogen pollution abatement is analyzed using Nebraska agriculture sector data. The shadow price of nitrogen pollution abatement treated as an undesirable output represents the reduced revenue from reducing nitrogen pollution. In contrast, the shadow price of nitrogen pollution abatement treated as an input reflects the increased cost of reducing nitrogen pollution. For the 1936-97 period, the estimated shadow price and cost of nitrogen pollution abatement for Nebraska ranges from $0.91 to$2.21 per pound and from $300 to$729 million, respectively.Direct and indirect approaches, disposability, nitrogen pollution, nonparametric programming, shadow price

Aggregation Issues in the Estimation of Linear Programming Productivity Measures

This paper demonstrates the sensitivity of the linear programming approach in the estimation of productivity measures in the primal framework using Malmquist productivity index and Malmquist total factor productivity index models. Specifically, the sensitivity of productivity measure to the number of constraints (level of dis-aggregation) and imposition of returns to scale constraints of linear programing is evaluated. Further, the shadow or dual values are recovered from the linear program and compared to the market prices used in the ideal Fisher index approach to illustrate sensitivity. Empirical application to U.S. state-level time series data from 1960-2004 reveal productivity change decreases with increases in the number of constraints. Further, the input and output shadow or dual values are skewed, leading to the difference in the productivity measures due to aggregation.Aggregation, Share-weights, single and multiple output and input, Malmquist productivity index, Malmquist total factor productivity index, Agribusiness, Production Economics,

An Efficiency Assessment of Refrigerated-Food-Products Trucking Carriers in the United States

Agribusiness,

A STATISTICAL EXAMINATION OF YIELD SWITCHING FRAUD IN THE FEDERAL CROP INSURANCE PROGRAM

An over-parameterized statistical yield-switching-fraud model is developed. Over-parameterized procedures are reviewed. Five percent of 206,952 producers (thirteen percent in one state) have suspicious yield patterns, elect higher coverage, and increase total multiple-unit indemnifications up to ten percent in some states and up to 30 percent at some coverage levels.Crop Production/Industries, Risk and Uncertainty,

OPTIONAL UNIT POLICY IN CROP INSURANCE

Utilizing ordered logit we examine the presence of two kinds of asymmetric information-adverse selection (intertemporal variability) and moral hazard (interspatial and/or residual variability) as revealed by the choice of optional units in Federal crop insurance utilizing Risk Management Agency's 1996-2000 cotton yield and loss data files. Further, a tobit model is estimated to examine the factors explaining the loss cost ratio from Risk Management Agency perspective. Potential costs of adverse selection and/or moral hazard in optional unit provision are estimated to be as high as $180 million in US cotton over the 1996-2000 period. Keywords: Adverse Selection, Moral Hazard, Optional Unit Policy, Crop Insurance, U.S. Cotton, Logit and Tobit models.Adverse Selection, Moral Hazard, Optional Unit Policy, Crop Insurance, U.S. Cotton, Logit and Tobit models., Risk and Uncertainty,