Econometric analysis reveals field-level soil productivity variations alter crop yield distributions and insurance rates in corn and soybean farms, indicating improved actuarial efficiency.
This study estimates the effects of farm‐level variations in soil productivity arising from crop rotation and field selection, measured by the National Commodity Crop Productivity Index (NCCPI), on crop yield distributions and crop insurance premium rates. Using geolocated field‐level data with 428,023 corn farm‐year observations and 362,400 soybean farm‐year observations, we quantify within‐farm differences in NCCPI as crop rotation reassigns fields across crops. Residual‐based moment estimation shows that farm‐level soil productivity significantly affects the mean, variance, and kurtosis of yields. A reinsurance simulation demonstrates that field‐level NCCPI data reduce loss ratios, improving premium accuracy and actuarial efficiency.
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Roznik et al. (2026) studied this question.
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