Published:
Cambridge, Mass: National Bureau of Economic Research, January 2011
Published in:NBER working paper series ; no. w16709
Extent:
1 Online-Ressource
Language:
English
DOI:
10.3386/w16709
Identifier:
Reproduction note:
Hardcopy version available to institutional subscribers
Origination:
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Mode of access: World Wide Web
Description:
If the extension of federal crop insurance programs to cover fruit and vegetable production has affected either producer or consumer welfare, then we would expect to see this reflected in output and prices. Exploiting variation in the timing of program introduction in different locations for different crops to estimate the effect of crop insurance on the output and prices of the insured crops
The federal government has developed a large number of programs to insure various "specialty crops" over the last two decades; a given program is peculiar to a particular county and crop. This development has been particularly notable in California, because of its size and the diversity of crops produced there
We find that the supply of and demand for insurance for tree crops is much larger than for non-tree crops. Crop insurance has a small but significant negative effect on prices of insured crops. This last finding is consistent with the view that demand for such highly disaggregated commodities is likely to be highly elastic. A consequence is that crop insurance for these specialty crops has little benefit for consumers, even when it generates a large supply response