Date of this Version
T.T. Kaus. "An Empirical Long-Run Competitive Equilibrium Model of Subsidized Crop Insurance and Farm Industry Structure." Masters Thesis.
Previous research has found a positive and significant planted acreage response to the participation in, and increases in the premium subsidization of, the federal crop insurance program. However, no research to our knowledge has evaluated what influence the response in planted acreage and crop choice to subsidized crop insurance has had on market industry in terms of farm numbers and average farm output. To address this issue, we utilize the theory of long-run competitive equilibrium with subsidized crop insurance to generate a conceptual model with econometrically testable hypotheses. Testing the econometric model in two distinct regions of the U.S, we find the premium subsidy regime change in the federal crop insurance program associated with the Agricultural Risk Protection Act of 2000 has contributed to fewer farms and larger average farm output across over 600 counties in two distinct regions in the U.S.
Advisors: Azzeddine Azzam and Cory Walters