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Are Crop Yields Normally Distributed? A Reexamination

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  • Joseph Atwood
  • Saleem Shaik
  • Myles Watts

Abstract

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.

Suggested Citation

  • Joseph Atwood & Saleem Shaik & Myles Watts, 2003. "Are Crop Yields Normally Distributed? A Reexamination," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 888-901.
  • Handle: RePEc:oup:ajagec:v:85:y:2003:i:4:p:888-901
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    File URL: http://hdl.handle.net/10.1111/1467-8276.00495
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