Yu, Jisang

May, 2024

By: Biram, Hunter; Tack, Jesse; Nehring, Richard; Yu, Jisang
The potential for moral hazard is an unforeseen outcome of achieving the dual agricultural policy goals of income stabilization and limited environmental impact. Here, we review key issues for identifying the moral hazard effects of crop insurance on pesticide use and include an empirical application that addresses both insurance endogeneity and quality adjustment of pesticides over time. Our results reveal no consistent linkage between insurance and pesticide use across four major crops. We discuss the differences in these effects across different specifications and crops and conclude by stressing that caution be used when looking to the academic literature for guidance on this key policy question.

May, 2023

By: Arnold, Chelsea; Yu, Jisang; Taylor, Mykel; Palm-Forster, Leah H.; Banerjee, Simanti
Understanding the role of risk in farmland leasing contract choices is important to assess the welfare consequences of farm policies or environmental changes that affect production risk. We use a unique dataset of landowners and tenants in Kansas to examine the role of risk in their farmland leasing contract choices. We find that greater production risk and more risk-averse landowners encourage fixed cash rent contracts. As many variables can potentially affect contract choices, we use a penalized regression to show that the inclusion of relationship variables leads to little change in the main results.

January, 2019

By: Yu, Jisang; Vandeveer, Monte; Volesky, Jerry D.; Harmoney, Keith
Using historical yield and rainfall data from three university-managed ranches in Kansas and Nebraska, we measure basis risk of Rainfall Index Insurance for Pasture, Rangeland, and Forage (PRF-RI). We investigate the relationship between forage yield and monthly precipitation and estimate the relationship between forage yield and PRF-RI indices. Finally, we estimate basis risk of PRF-RI. Our estimates suggest that using actual site-level precipitation values would reduce basis risk by only 5%–9%, indicating that basis risk stems mostly from nonprecipitation factors. Using more flexible contract forms with site-level precipitation would have little impact on decreasing the degree of basis risk.