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Estimating the Prevalence and Cost of Yield‐Switching Fraud in the Federal Crop Insurance Program
Author(s) -
Atwood Joseph A.,
Robison-Cox James F.,
Shaik Saleem
Publication year - 2006
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 - 10.1111/j.1467-8276.2006.00864.x
Subject(s) - crop insurance , yield (engineering) , unit (ring theory) , crop , actuarial science , statistical model , business , econometrics , agricultural science , agricultural economics , economics , statistics , mathematics , agriculture , environmental science , agronomy , geography , metallurgy , biology , materials science , mathematics education , archaeology
Producers who manipulate and switch their reported crop‐yields between separately insured units can increase their insurance indemnities substantially. A statistical model that identifies potential yield switching is developed. The unrestricted statistical model is singular and is identified by imposing a mixture of system‐estimable and system‐nonestimable restrictions. Lower bound estimates of yield‐switching fraud incidence and costs are obtained by applying the model to 207,067 multiple unit producers who purchased crop insurance in 1998.