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Using insurance data to quantify the multidimensional impacts of warming temperatures on yield risk

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  • Edward D. Perry

    (Kansas State University)

  • Jisang Yu

    (Kansas State University)

  • Jesse Tack

    (Kansas State University)

Abstract

Previous research predicts significant negative yield impacts from warming temperatures, but estimating the effects on yield risk and disentangling the relative causes of these losses remains challenging. Here we present new evidence on these issues by leveraging a unique publicly available dataset consisting of roughly 30,000 county-by-year observations on insurance-based measures of yield risk from 1989–2014 for U.S. corn and soybeans. Our results suggest that yield risk will increase in response to warmer temperatures, with a 1 °C increase associated with yield risk increases of approximately 32% and 11% for corn and soybeans, respectively. Using cause of loss information, we also find that additional losses under warming temperatures primarily result from additional reported occurrences of drought, with reported losses due to heat stress playing a smaller role. An implication of our findings is that the cost of purchasing crop insurance will increase for producers as a result of warming temperatures.

Suggested Citation

  • 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.
    • Handle: RePEc:nat:natcom:v:11:y:2020:i:1:d:10.1038_s41467-020-17707-2
    DOI: 10.1038/s41467-020-17707-2
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    Cited by:

    1. Serkan Aglasan & Barry K. Goodwin & Roderick M. Rejesus, 2023. "Risk effects of GM corn: Evidence from crop insurance outcomes and high‐dimensional methods," Agricultural Economics, International Association of Agricultural Economists, vol. 54(1), pages 110-126, January.
    2. Youngho Kim, 2024. "Payments for Ecosystem Services Programs and Climate Change Adaptation in Agriculture," Economics Series Working Papers 1054, University of Oxford, Department of Economics.
    3. Yang, Meijian & Wang, Guiling, 2023. "Heat stress to jeopardize crop production in the US Corn Belt based on downscaled CMIP5 projections," Agricultural Systems, Elsevier, vol. 211(C).
    4. repec:ags:aaea22:335462 is not listed on IDEAS
    5. Christopher N. Boyer & Eunchun Park & Seong D. Yun, 2023. "Corn and soybean prevented planting acres response to weather," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(2), pages 970-983, June.
    6. Tsiboe, Francis & Turner, Dylan, 2023. "The crop insurance demand response to premium subsidies: Evidence from U.S. Agriculture," Food Policy, Elsevier, vol. 119(C).
    7. Sunjae Won & Roderick M. Rejesus & Barry K. Goodwin & Serkan Aglasan, 2024. "Understanding the effect of cover crop use on prevented planting losses," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(2), pages 659-683, March.
    8. Jisang Yu & Edward D. Perry, 2024. "Premium subsidies and selection in the federal crop insurance program," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(1), pages 280-297, February.
    9. Aglasan, Serkan & Rejesus, Roderick M., 2022. "Do Cover Crops Reduce Production Risk?," 2022 Annual Meeting, July 31-August 2, Anaheim, California 324776, Agricultural and Applied Economics Association.
    10. Qiao, Shengchao & Harrison, Sandy P. & Prentice, I. Colin & Wang, Han, 2023. "Optimality-based modelling of wheat sowing dates globally," Agricultural Systems, Elsevier, vol. 206(C).
    11. 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.
    12. Serkan Aglasan & Roderick M. Rejesus & Stephen Hagen & William Salas, 2024. "Cover crops, crop insurance losses, and resilience to extreme weather events," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(4), pages 1410-1434, August.

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