Campus Units

Economics, Center for Agricultural and Rural Development

Document Type

Article

Publication Version

Published Version

Publication Date

5-2016

Journal or Book Title

Journal of Agricultural and Resource Economics

Volume

41

Issue

2

First Page or Article ID Number

247

Last Page

265

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.

Comments

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.

Copyright Owner

Western Agricultural Economics Association

Language

en

File Format

application/pdf

Working Paper

Share

COinS