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Government Insurance Program Design, Incentive Effects, and Technology Adoption: The Case of Skip-Row Crop Insurance

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  • Joshua D. Woodard
  • Alexander D. Pavlista
  • Gary D. Schnitkey
  • Paul A. Burgener
  • Kimberley A. Ward
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    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. Copyright 2012, Oxford University Press.

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    File URL: http://hdl.handle.net/10.1093/ajae/aas018
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    Bibliographic Info

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

    Volume (Year): 94 (2012)
    Issue (Month): 4 ()
    Pages: 823-837

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    Handle: RePEc:oup:ajagec:v:94:y:2012:i:4:p:823-837

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    Cited by:
    1. Dolginow, Joseph & Massey, Raymond & Myers, Brent & Kitchen, Newell, 2013. "Adjusting Crop Insurance APH Calculation to Accommodate Biomass Production," 2013 AAEA: Crop Insurance and the Farm Bill Symposium, October 8-9, Louisville, KY 156945, Agricultural and Applied Economics Association.
    2. Miao, Ruiqing & Khanna, Madhu, 2013. "Crop Insurance for Energy Grasses," 2013 AAEA: Crop Insurance and the Farm Bill Symposium, October 8-9, Louisville, KY 156936, Agricultural and Applied Economics Association.

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