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Are Crop Yields Normally Distributed? A Reexamination


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  • Joseph Atwood
  • Saleem Shaik
  • Myles Watts


This article demonstrates that normality test procedures that include individual detrending of short-term panel data can severely reduce the power of normality tests and strongly bias normality tests in a Type II direction. An alternative error component implicit detrending procedure is suggested that demonstrates higher power for the distributions examined. Both procedures are applied to a large data set with normality of yield residuals being rejected. Assuming normality is shown to reduce potential premium rates for a large number of producers in an existing crop insurance product. Copyright 2003, Oxford University Press.

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Bibliographic Info

Article provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 85 (2003)
Issue (Month): 4 ()
Pages: 888-901

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Handle: RePEc:oup:ajagec:v:85:y:2003:i:4:p:888-901

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Cited by:
  1. Belasco, Eric J. & Taylor, Mykel R. & Goodwin, Barry K. & Schroeder, Ted C., 2009. "Probabilistic Models of Yield, Price, and Revenue Risks for Fed Cattle Production," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 41(01), April.
  2. Hennessy, David A., 2009. "Crop Yield Skewness and the Normal Distribution," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(1), April.
  3. Poitras, Geoffrey, 2006. "More on the correct use of omnibus tests for normality," Economics Letters, Elsevier, vol. 90(3), pages 304-309, March.
  4. Conradt, Sarah & Bokusheva, Raushan & Finger, Robert & Kussaiynov, Talgat, 2012. "Yield trend estimation in the presence of non-constant technological change and weather effects," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122541, European Association of Agricultural Economists.
  5. Zheng, Qiujie & Wang, H. Holly & Shi, Qinghua, 2008. "Estimating Farm Level Multivariate Yield Distribution Using Nonparametric Methods," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6509, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  6. Medina, Felipe & Iglesias, Ana, 2008. "Economic Feasibility of Organic Farms and Risk Management Strategies," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44065, European Association of Agricultural Economists.
  7. Hennessy, David A., 2011. "Modeling Stochastic Crop Yield Expectations with a Limiting Beta Distribution," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(1), April.
  8. Tolhurst, Tor & Ker, Alan P., 2013. "On Technological Change in Crop Yields," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 151269, Agricultural and Applied Economics Association.
  9. Walters, Cory G. & Preston, Richard, 2013. "Revenue Risk, Crop Insurance and Forward Contracting," 2013 AAEA: Crop Insurance and the Farm Bill Symposium, October 8-9, Louisville, KY 156821, Agricultural and Applied Economics Association.
  10. Phoebe Koundouri & Nikolaos Kourogenis, 2011. "On the Distribution of Crop Yields: Does the Central Limit Theorem Apply?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(5), pages 1341-1357.
  11. Hennessy, David A., 2012. "Crop Yield Skewness Under Law of Minimum Technology," Staff General Research Papers 35018, Iowa State University, Department of Economics.
  12. Chen, Shu-Ling & Miranda, Mario J., 2006. "Modeling Yield Distribution In High Risk Counties: Application To Texas Upland Cotton," 2006 Annual meeting, July 23-26, Long Beach, CA 21392, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  13. Lanoue, Christopher & Sherrick, Bruce J. & Woodard, Joshua D. & Paulson, Nicholas D., 2010. "Evaluating Yield Models for Crop Insurance Rating," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61761, Agricultural and Applied Economics Association.
  14. Gerlt, Scott & Westhoff, Patrick, 2013. "Analysis of the Supplemental Coverage Option," 2013 AAEA: Crop Insurance and the Farm Bill Symposium, October 8-9, Louisville, KY 156704, Agricultural and Applied Economics Association.
  15. Medina, Felipe & Iglesias, Ana & Mateos, Carlos, 2007. "Risk management, vulnerability, and risk perception of organic farmers in Spain," 101st Seminar, July 5-6, 2007, Berlin Germany 9274, European Association of Agricultural Economists.
  16. Buchholz, Matthias & Musshoff, Oliver, 2014. "The role of weather derivatives and portfolio effects in agricultural water management," 2014 Conference (58th), February 4-7, 2014, Port Maquarie, Australia 165812, Australian Agricultural and Resource Economics Society.


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