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Estimating temperature impacts on perennial crop losses in California: Insights from insurance data

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  • Jisang Yu
  • Gyuhyeong Goh

Abstract

This study provides a novel empirical framework for estimating the effects of temperature on the production of several tree crops in California by using underused insurance data and a variable selection technique. We utilize a Bayesian variable selection technique to select relevant temperature variables. We then use the selected temperature variables to assess the temperature effects on crop losses. We find that a greater length to freeze exposure increases crop losses and relatively smaller roles of chill hours and heating hours. We also find the heterogeneity of the effects across insurance coverage levels.

Suggested Citation

  • Jisang Yu & Gyuhyeong Goh, 2022. "Estimating temperature impacts on perennial crop losses in California: Insights from insurance data," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(3), pages 1409-1423, September.
    • Handle: RePEc:wly:apecpp:v:44:y:2022:i:3:p:1409-1423
    DOI: 10.1002/aepp.13222
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    References listed on IDEAS

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    1. Edward D. Perry & Jisang Yu & Jesse Tack, 2020. "Using insurance data to quantify the multidimensional impacts of warming temperatures on yield risk," Nature Communications, Nature, vol. 11(1), pages 1-9, December.
    2. Hyunok Lee & Daniel Sumner, 2015. "Economics of downscaled climate-induced changes in cropland, with projections to 2050: evidence from Yolo County California," Climatic Change, Springer, vol. 132(4), pages 723-737, October.
    3. Wooldridge, Jeffrey M., 1999. "Distribution-free estimation of some nonlinear panel data models," Journal of Econometrics, Elsevier, vol. 90(1), pages 77-97, May.
    4. Juan He & Roderick Rejesus & Xiaoyong Zheng & Jose Yorobe, 2018. "Advantageous Selection in Crop Insurance: Theory and Evidence," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(3), pages 646-668, September.
    5. David Lobell & Angela Torney & Christopher Field, 2011. "Climate extremes in California agriculture," Climatic Change, Springer, vol. 109(1), pages 355-363, December.
    6. David Lobell & Christopher Field, 2011. "California perennial crops in a changing climate," Climatic Change, Springer, vol. 109(1), pages 317-333, December.
    7. Joseph W. Glauber, 2013. "The Growth Of The Federal Crop Insurance Program, 1990--2011," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(2), pages 482-488.
    8. Yu, Jisang & Sumner, Daniel A. & Lee, Hyunok, 2021. "Premium rates and selection in specialty crop insurance markets: Evidence from the catastrophic coverage participation," Food Policy, Elsevier, vol. 101(C).
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