Does Crop Insurance Affect Crop Yields?
We use administrative data from the Federal crop insurance program to examine how yield distributions change as farmers cycle into and out of the program. We are able to do this by linking many years of crop insurance data by individual farm conditioning observed yields on the particular county and year in which they are observed. Armed with millions of observations, we examine many states and five major crops: corn, soybeans, wheat, rice and cotton. We find little evidence that yield distributions are affected by insurance. An exception is rice in Arkansas, where insurance shifts the distribution markedly downward.
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