Premium
Government Insurance Program Design, Incentive Effects, and Technology Adoption: The Case of Skip‐Row Crop Insurance
Author(s) -
Woodard Joshua D.,
Pavlista Alexander D.,
Schnitkey Gary D.,
Burgener Paul A.,
Ward Kimberley A.
Publication year - 2012
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aas018
Subject(s) - incentive , crop insurance , government (linguistics) , resampling , actuarial science , nonparametric statistics , business , econometrics , economics , statistics , agriculture , microeconomics , mathematics , philosophy , ecology , linguistics , biology
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.