Econometric Models of Crop Yields: Two Essays

Abstract

This thesis is an investigation of econometric crop yield models divided into two essays. In the first essay, I propose estimating a single heteroscedasticity coefficient for all counties within a crop-reporting district by pooling county-level crop yield data in a two-stage estimation process. In the context of crop insurance---where heteroscedaticity has significant economic implications---I demonstrate the pooling approach provides economically and statistically significant improvements in rating crop insurance contracts over contemporary methods. In the second essay, I propose a new method for measuring the rate of technological change in crop yields. To date the agricultural economics literature has measured technological change exclusively at the mean; in contrast, the proposed model can measure the rate of technological change in endogenously-defined yield subpopulations. I find evidence of different rates of technological change in yield subpopulations, which leads to interesting questions about the effect of technological change on agricultural production.