Main content

The Effect of Climate and Innovation on Year-to-year Crop Yield Volatility in Ontario

Show full item record

Title: The Effect of Climate and Innovation on Year-to-year Crop Yield Volatility in Ontario
Author: Jiang, Yuetian
Department: Department of Food, Agricultural and Resource Economics
Program: Food, Agriculture and Resource Economics
Advisor: Ker, Alan P.
Abstract: The substantial amount of public monies funnelled into the Canadian business risk management programs -- meant to offset the nancial burden caused by volatile low yield realizations -- has raised a wide range of concerns regarding the e cacy, especially the actuarial soundness, of the programs. In face of ever-changing climate and technological innovation, adequately accounting for changes in yield volatility is necessary for the policy responses to potential production risks. In this thesis, Ontario corn yield volatility is modelled both symmetrically and asymmetrically. First, volatility is modelled as deviations from the mean; second, volatility is divided into two groups by sign; third, as the space between quantile trend lines; fourth, year-to-year volatility changes are modelled by allowing the variances of a two-normal mixture to vary with time. In addition, 4 temperature-related and 2 moisture-related measures are used to represent the climate effects, while innovation is considered the mean residual e ects not explained by climate. There is strong evidence for signi cant increases in overall corn yield volatility from 1950-2013. More importantly, there is also signi cant additional increases in the lower tail volatility. These asymmetric volatility increases are contributed by an 18%-82% climate-innovation split on average. There is also evidence that the effects of high temperature and precipitation on the volatility are statistically signi cant, which is supported by another nding that yields are becoming more susceptible to precipitation shortfalls. The thesis concludes that ignoring these asymmetric yield volatility changes would lead to different estimates for premium rates.
Date: 2017-12
Rights: Attribution-NonCommercial-NoDerivs 2.5 Canada
Terms of Use: All items in the Atrium are protected by copyright with all rights reserved unless otherwise indicated.

Files in this item

Files Size Format View Description
Jiang_Yuetian_201712_MSc.pdf 12.32Mb PDF View/Open Thesis final version

This item appears in the following Collection(s)

Show full item record

Attribution-NonCommercial-NoDerivs 2.5 Canada Except where otherwise noted, this item's license is described as Attribution-NonCommercial-NoDerivs 2.5 Canada