We hypothesize that imperfect quality measurement in contracts for fresh fruits and vegetables results in a moral-hazard problem, and that the final price of the produce provides additional information regarding quality. As a consequence, growers are not shielded from all price risk. This...

We develop a method to structurally estimate principal-agent models by ordinary least squares (OLS). We set up a general principal-agent model which explicitly incorporates the wealth levels of each party and the opportunity cost to the agent of entering the contract. This yields an optimal...

Systemic weather risk is a major obstacle for the formation of private (nonsubsidized) crop insurance. This paper explores the possibility of spatial diversification of insurance by estimating the joint occurrence of unfavorable weather conditions in different locations. For that purpose copula...

This article examines the extent to which actual crop insurance indemnification behavior conforms to the theoretical predictions of two ex post moral hazard models costly state verification and costly state falsification. A nonparametric regression technique is used to estimate the crop...

It is possible for the traditional hedge ratio estimation to produce erroneous guidance to risk managers because of the restrictive assumptions. This study adopts nonparametric locally polynomial kernel estimation to exclude the assumptions. Results from the hog complex find that hedge ratios...

This paper studies farm business interruption insurance for Classical Swine Fever epidemics. Insight into the size of risk is obtained by a very detailed Monte-Carlo simulation model that includes both epidemiological and economic factors. The paper also considers issues such as farmers' and...

Xi Chen acknowledges generous Doctoral Research Grant from the Institute for the Social Sciences at Cornell University and precious data set provided by the Development Strategy and Governance Division at IFPRI. Conference Travel Grant provided by the Department of Applied Economics and...

Recent years have seen mass casualties and severe property damage caused by wildland fires. With increasing housing development in natural-amenity-rich fire-prone areas, human activities not only exert intense pressures on local ecosystems, but also increase difficulties for wildland fire...

The prospect of immigration policy reform has renewed growers’ concerns of serious labor shortages and cost increases. These concerns are more serious for specialty crop agriculture, not only because it is highly labor intensive, but also it requires labor in a very short period, particularly...