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Climate, Insurance, and Crop Yield: Evidence from U.S. Agriculture

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  • Bhandari, Nabin
  • Miao, Ruiqing

Abstract

This paper investigates the impact of federal crop insurance program (FCIP) on corn and soybean yields in the United States, using a county-level large panel dataset spanning over 1950-2022. As extreme heat becomes a grand challenge in the U.S. agriculture, the focus of this article is on estimating the mediating role of FCIP on weather-yield relationship using different identification techniques. Results from fixed effect instrumental variable (FE-IV) approach suggest that the sensitivity of insured corn yield to overheat growing degree days (GDD) is 36%-104% higher than non-insured corn, depending upon the time frame under consideration. Similarly, results from staggered Difference-in-Difference (DiD) estimation technique suggest that the negative effect of FCIP on insured corn yield is pronounced in hot counties when compared to cool counties. Similar patterns are observed for soybean yields.

Suggested Citation

  • Bhandari, Nabin & Miao, Ruiqing, 2025. "Climate, Insurance, and Crop Yield: Evidence from U.S. Agriculture," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 361070, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea25:361070
    DOI: 10.22004/ag.econ.361070
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