Government insurance program design, incentive effects, and technology adoption: The case of skip-row crop insurance

Joshua D. Woodard; Alexander D. Pavlista; Gary D. Schnitkey; Paul A. Burgener; Kimberley A. Ward

doi:10.1093/ajae/aas018

Government insurance program design, incentive effects, and technology adoption: The case of skip-row crop insurance

Joshua D. Woodard, Alexander D. Pavlista, Gary D. Schnitkey, Paul A. Burgener, Kimberley A. Ward

Research output: Contribution to journal › Article › peer-review

Abstract

Can the availability of poorly-designed government insurance alter technology adoption decisions? A theoretical model of technology adoption and insurance incentive effects for a high- and low-risk technology is developed and explored empirically using a unique dataset of skip-row agronomic trial data. A multivariate nonparametric resampling technique is developed, which augments the trial data with a larger dataset of conventional yields to improve estimation efficiency. Skip-row adoption is found to increase mean yields and reduce risk in areas prone to drought. RMA insurance rules have incentive-distorting impacts which disincentivize skip-row adoption.

Original language	English (US)
Pages (from-to)	823-837
Number of pages	15
Journal	American Journal of Agricultural Economics
Volume	94
Issue number	4
DOIs	https://doi.org/10.1093/ajae/aas018
State	Published - Jul 2012

Keywords

Adverse selection
Federal Crop Insurance
Insurance design
Insurance pricing
Nonparametric methods
Risk management
Skip-row corn
Technology adoption
Yield risk

ASJC Scopus subject areas

Agricultural and Biological Sciences (miscellaneous)
Economics and Econometrics

Online availability

10.1093/ajae/aas018

Library availability

Discover UIUC Full Text

Cite this

@article{b7aec50a160e4a89b2d0260637aa34ea,

title = "Government insurance program design, incentive effects, and technology adoption: The case of skip-row crop insurance",

abstract = "Can the availability of poorly-designed government insurance alter technology adoption decisions? A theoretical model of technology adoption and insurance incentive effects for a high- and low-risk technology is developed and explored empirically using a unique dataset of skip-row agronomic trial data. A multivariate nonparametric resampling technique is developed, which augments the trial data with a larger dataset of conventional yields to improve estimation efficiency. Skip-row adoption is found to increase mean yields and reduce risk in areas prone to drought. RMA insurance rules have incentive-distorting impacts which disincentivize skip-row adoption.",

keywords = "Adverse selection, Federal Crop Insurance, Insurance design, Insurance pricing, Nonparametric methods, Risk management, Skip-row corn, Technology adoption, Yield risk",

author = "Woodard, {Joshua D.} and Pavlista, {Alexander D.} and Schnitkey, {Gary D.} and Burgener, {Paul A.} and Ward, {Kimberley A.}",

year = "2012",

month = jul,

doi = "10.1093/ajae/aas018",

language = "English (US)",

volume = "94",

pages = "823--837",

journal = "American Journal of Agricultural Economics",

issn = "0002-9092",

publisher = "John Wiley & Sons, Ltd.",

number = "4",

}

TY - JOUR

T1 - Government insurance program design, incentive effects, and technology adoption

T2 - The case of skip-row crop insurance

AU - Woodard, Joshua D.

AU - Pavlista, Alexander D.

AU - Schnitkey, Gary D.

AU - Burgener, Paul A.

AU - Ward, Kimberley A.

PY - 2012/7

Y1 - 2012/7

N2 - Can the availability of poorly-designed government insurance alter technology adoption decisions? A theoretical model of technology adoption and insurance incentive effects for a high- and low-risk technology is developed and explored empirically using a unique dataset of skip-row agronomic trial data. A multivariate nonparametric resampling technique is developed, which augments the trial data with a larger dataset of conventional yields to improve estimation efficiency. Skip-row adoption is found to increase mean yields and reduce risk in areas prone to drought. RMA insurance rules have incentive-distorting impacts which disincentivize skip-row adoption.

AB - Can the availability of poorly-designed government insurance alter technology adoption decisions? A theoretical model of technology adoption and insurance incentive effects for a high- and low-risk technology is developed and explored empirically using a unique dataset of skip-row agronomic trial data. A multivariate nonparametric resampling technique is developed, which augments the trial data with a larger dataset of conventional yields to improve estimation efficiency. Skip-row adoption is found to increase mean yields and reduce risk in areas prone to drought. RMA insurance rules have incentive-distorting impacts which disincentivize skip-row adoption.

KW - Adverse selection

KW - Federal Crop Insurance

KW - Insurance design

KW - Insurance pricing

KW - Nonparametric methods

KW - Risk management

KW - Skip-row corn

KW - Technology adoption

KW - Yield risk

UR - http://www.scopus.com/inward/record.url?scp=84862900418&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84862900418&partnerID=8YFLogxK

U2 - 10.1093/ajae/aas018

DO - 10.1093/ajae/aas018

M3 - Article

AN - SCOPUS:84862900418

SN - 0002-9092

VL - 94

SP - 823

EP - 837

JO - American Journal of Agricultural Economics

JF - American Journal of Agricultural Economics

IS - 4

ER -

Government insurance program design, incentive effects, and technology adoption: The case of skip-row crop insurance

Abstract

Keywords

ASJC Scopus subject areas

Online availability

Library availability

Related links

Fingerprint

Cite this