The Market Structure for Crop Insurance Agents and the Effects on Insurance Contracts
with Hayley H. Chouinard, Cory G. Walters, and Philip R. Wandschneider
We examine how the market structure of crop insurance agents affects rent-seeking in the federal crop insurance program. Agents may influence producers’ insurance choices to maximize total compensation. We develop a theoretical model of producer-agent interaction to generate testable hypotheses for how loss potential, agent compensation mechanisms, and market competition affect the coverage level selected. Using a producer level dataset from five states, we find evidence that agents’ market share and market concentration matter in the insurance coverage decisions of producers. Agents’ influence on contract premiums and liabilities are mixed across states which may be attributable to differences in loss risk and agent compensation mechanisms. We find limited evidence that high concentration of agents can reduce adverse selection in the federal crop insurance program.
The Impact of Federal Crop Insurance on the Conservation Reserve Program
(In revision at Agricultural and Resource Economics Review)
I directly estimate the acre-for-acre impact of crop insurance participation on CRP enrollment at the county level. The government may be sponsoring competing interests if subsidized insurance expands production at the expense of CRP. I employ an instrumental variables technique to correct for endogeneity in insurance decisions. Results suggest that an additional 1,000 acres insured reduces CRP enrollment by about three acres, though effect sizes vary by region. Local policy initiatives such as conservation compliance incentives could help offset local environmental consequences of converting land from CRP to insured production.
Linking Calving Intervals to Milk Production and Household Nutrition in Kenya (Under review at Food Security)
with S. M. Thumbi, Julia Vanderford, Elkanah Otiang, Linus Ochieng, M. Kariuki Njenga, Guy H. Palmer, and Thomas L. Marsh
Maternal and child malnutrition resulting in childhood stunting remains prevalent in east Africa, leading to increased disease risk, limiting cognitive development, and impeding human capital accumulation that constrains individuals, communities, and nations from reaching their full potential. In a western Kenyan population with a high prevalence of childhood stunting, frequency of milk consumption has been shown to increase monthly height gain in children, indicating the potential to improve health through livestock productivity. However, calving rates remain low, constraining the availability of milk to the household. Here we model average herd-level calving intervals and its relation to milk yield and nutrition in the context of an agricultural household production model, applying a dynamic panel econometric approach to household level data. We provide evidence that targeted on-farm specialization leads to significantly higher calving rates and shorter calving intervals, which in turn predictably increase milk production. Importantly, we show that the positive link between calving and household milk nutrition is present across households that primarily consume milk produced on-farm (“producer-consumers”) and those that predominantly purchase milk (“milk buyers”), indicating that efforts to improve herd fertility in western Kenya could improve food security on a community scale.
Categorizing Agritourism Operations and Identifying Barriers to Success
(forthcoming in Journal of Agribusiness)
with Hayley H. Chouinard and Philip R. Wandschneider
Agritourism comprises heterogeneous firms that cannot be easily categorized. We apply principal components analysis to data in Washington State to uncover latent relationships among agritourism activities. We find most agritourism firms cluster in four groups, labelled: seasonal activities, event providers, farm and ranch tourism providers, and direct sales. A sorting mechanism assigns most firms to these groups. Using ordered logit regressions we find that clustering and sorting reveal differences in how groups perceive barriers to success. We confirm that most firms are concerned about regulations and zoning laws. However, we find nuances in the concerns over insurance availability, and need for financial assistance and business knowledge.