Three essays on crop yield, crop insurance and climate change
The main subject of this dissertation includes the study of the impact of weather on crop yields and developing crop revenue insurance product. The dissertation limits its analysis to the state of Iowa because it's a critical corn production area in the United States. Chapter 2 introduced a dynamic linear model to measure weather-adjusted trends in Iowa corn yields. The weather factors consist of the amount of rainfall, temperature and a measurement of soil moisture. Results show a significant improved yield growth in the 1990s, controlling for the impact of weather. Results also indicate that the critical temperature varies across the state of Iowa. The critical temperature is higher in the areas of the state with higher soil quality and is most suitable to grow corn. Chapter 3 develops a long-term corn revenue insurance product that provides crop growers with yield or revenue protection for as long as five years into the future. The premium rates are calculated at both county and farm level. Chapter 4 estimates the impact of projected climate change on Iowa corn yield. The climate projection indicates a significant increase in the daily maximum temperature in July, whereas a significant increment trend is not found in the amount of rainfall during June to August. Controlling for the uncertainty in yield projection, results indicate that projected climate change will cause a statewide reduction of corn yield by 10% at the end of this century. Controlling for uncertainty in climate projection and allowing for uncertainty in yield projections, results show that projected climate change reduces Iowa corn yield by 9%.