Evaluating yield models for crop insurance rating

Lanoue, Christopher

Permalink

https://hdl.handle.net/2142/16920 Copy

Description

Title

Evaluating yield models for crop insurance rating

Author(s)

Lanoue, Christopher

Issue Date

2010-08-20T18:01:56Z

Director of Research (if dissertation) or Advisor (if thesis)

Sherrick, Bruce J.

Department of Study

Agr & Consumer Economics

Discipline

Agr & Consumer Economics

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

M.S.

Degree Level

Thesis

Keyword(s)

• Yield distributions
• Crop Insurance
• Weibull Distribution
• Beta Distribution
• Mixture Distribution
• Burr XII Distribution
• Out-of-Sample Efficiency
• Goodness-of-Fit
• Insurance Rating Efficiency

Abstract

Crop insurance performance and loss rates depend directly on underlying crop yield distributions. However, there still exists much debate about how to represent the underlying crop yield distributions. Using farm-level corn and soybean yields from 1972-2008, this study examines in-sample goodness-of-fit measures of both the whole distribution and the insurance tail to compare a set of flexible parametric, semi-parametric, and non-parametric distributions in a meaningful economic context. Simulations are then conducted to investigate the out-of-sample efficiency properties of several competing distributions. The results indicate that more parameterized distributional forms fit the data better in-sample, but are generally less efficient out-of-sample - and in some cases more biased - than more parsimonious forms which also fit the data adequately, such as the Weibull. The results highlight the relative advantages of alternative distributions, in terms of the bias-efficiency tradeoff in both in- and out-of-sample frameworks.

Graduation Semester

2010-08

Permalink

http://hdl.handle.net/2142/16920

Copyright and License Information

Copyright 2010 Christopher Lanoue

Owning Collections