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Race and Premium Misrating in the U.S. Federal Crop Insurance Program

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  • Teal, Jim
  • Stevens, Andrew W.

Abstract

USDA farm support programs have an established history of racial discrimination. Today, the Federal Crop Insurance Program is among the largest and most important programs available to U.S. farmers. Previous research has documented systematic misrating of crop insurance premiums with sizable welfare implications. In this paper, we explore whether producer race measured at the county level has explanatory power in a model of crop insurance misrating. We find that in some cases it does, raising concerns about the possibilities of racially discriminatory impacts of the RMA's rate‐setting methodology. Further research is needed to isolate the mechanisms that explain our findings.
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Suggested Citation

  • Teal, Jim & Stevens, Andrew W., 2022. "Race and Premium Misrating in the U.S. Federal Crop Insurance Program," 2022 Agricultural and Rural Finance Markets in Transition, October 17-18, 2022, Detroit, Michigan 329259, Regional Research Committee NC-1177 (formerly NC-1014): Agricultural and Rural Finance Markets in Transition.
    • Handle: RePEc:ags:nc1117:329259
    DOI: 10.22004/ag.econ.329259
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    References listed on IDEAS

    as
    1. Ashley Elaine Hungerford & Barry Goodwin, 2014. "Big assumptions for small samples in crop insurance," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 74(4), pages 477-491, October.
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