Producer Experience, Learning by Doing, and Yield Performance
Current crop insurance rating procedures consider only performance for the individual crop in question. Recent farm legislation has given producers considerable planting flexibility and, as a result, many have shifted to new crops. Producers without a production history for the new crop may be offered levels of insurance that do not accurately reflect their expected yields. Likewise, premium rates may not reflect a producer's actual risk for a new crop. We examine the extent to which information about expected yields may be gleaned from a consideration of historical performance on other crops. We also consider the extent to which yield performance exhibits learning by doing such that yields improve with experience. Though the results are mixed, we generally find that yield performance tends to improve with experience. However, when yields are conditioned on historical yield performance for other crops, the importance of experience is diminished significantly. Yield performance is related to a number of farm characteristics. Finally, we examine the extent to which yield variability is correlated across crops for individual farmers. Implications for crop insurance rating practices are discussed. The results demonstrate robust correlation between a farm's historical yield on other crops and a newly produced crop—a factor largely ignored in current crop insurance contracts. Copyright 2002, Oxford University Press.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 84 (2002)
Issue (Month): 3 ()
|Contact details of provider:|| Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202|
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:oup:ajagec:v:84:y:2002:i:3:p:660-678. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.