A1174
Title: Crop insurance and farm-level productivity: Evidence from Kansas
Authors: Youngjune Kim - Kangwon National University (Korea, South) [presenting]
Hanbin Lee - Kyungpook National University (Korea, South)
Dustin Pendell - Kansas State University (United States)
Abstract: The influence of crop insurance participation on agricultural productivity at the farm level is investigated. Utilizing a panel dataset from 1993 to 2018 that includes production data, farm characteristics, and financial information for farms in Kansas, a control function approach is employed to estimate a production function and derive farm specific, time varying measures of total factor productivity. Based on these productivity estimates, an instrumental variable approach is used to assess the impact of crop insurance expenditures per acre on farm productivity, accounting for the potential endogeneity of insurance spending decisions. The findings indicate that increases in per acre crop insurance expenditures have a positive effect on farm level agricultural productivity.
