A large body of research has evaluated price linkages in spatially separate markets. Much recent research has applied models appropriate for nonstationary data. Such analyses have been criticized for their ignorance of transactions costs, which may inhibit price adjustments and thus affect tests of integration. This analysis utilizes threshold autoregression and cointegration models to account for a neutral band representing transactions costs. We evaluate daily price linkages among four corn and four soybean markets in North Carolina. Nonlinear impulse response functions are used to investigate dynamic patterns of adjustments to shocks. Our results confirm the presence of thresholds and indicate strong support for market integration, though adjustments following shocks may take many days to be complete. In every case, the threshold models suggest much faster adjustments in response to deviations from equilibrium than is the case when threshold behavior is ignored. Copyright 2001, Oxford University Press.

This study examines the relationship between chemical input use and crop insurance purchase decisions for a sample of Kansas dryland wheat farmers. Recent research by Horowitz and Lichtenberg indicated that, contrary to conventional wisdom, farmers that purchased insurance tended to use relatively more chemical inputs than farmers who did not insure. In contrast, our results confirm the conventional view that moral hazard incentives lead insured farmers to use fewer chemical inputs. Implications for the joint determination of insurance and input use decisions and appropriate estimation techniques are discussed. Copyright 1996, Oxford University Press.

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Knowledge of factors affecting farmer purchases of crop insurance is essential for evaluating the soundness and profitability of crop insurance programs. Despite this importance, the demand for crop insurance has received limited empirical attention. The present paper reports on an empirical assessment of the demand for crop insurance by Iowa com producers. Adverse selection in the insured pool suggests that producers with differing levels of loss-risk have different demand elasticities. Loss-risk is included in the empirical analysis and is found to influence the elasticity of demand. Results show average demand elasticities of about -0.32 for relative insured acres and -0.73 for liability per planted acre. Implications for the actuarial soundness of the industry are provided.

If farmers are risk averse, greater farm income variability should increase off-farm labor supply. This effect is confirmed for a sample of Kansas farmers. Off-farm employment of farmers and their spouses is also found to be significantly influenced by farm experience, off-farm work experience, farm size, leverage, efficiency, and farm-specific education. In addition, farm operators and spouses who receive significant income support through government farm programs are less likely to work off the farm. This may suggest that policy changes reducing farm income support payments may increase off-farm employment of farmers and their spouses. Copyright 1997, Oxford University Press.

This analysis empirically evaluates spatial linkages in regional cattle markets using cointegration tests of regional price series. Several markets were not cointegrated over the 1980 through 1987 period. However, significant increases in cointegration of several regional livestock markets are observed through the 1980s. The increased cointegration parallels significant structural changes in the livestock industry. A formal analysis of market characteristics reveals that distances between markets, industry concentration ratios, market volumes, and market types have significant influences on cointegration relationships between markets.

The extent to which crop insurance programs have resulted in additional land being brought into production has been a topic of considerable debate. We consider multiequation structural models of acreage response, insurance participation, CRP enrollment, and input usage. Our analysis focuses on corn and soybean production in the Corn Belt and wheat and barley production in the Upper Great Plains. Our results confirm that increased participation in insurance programs provokes statistically significant acreage responses in some cases, though the response is very modest in every case. In the most extreme cases, 30% decreases in premiums as a result of increased subsidies provoke acreage increases ranging from 0.2% to 1.1%. A number of policy simulations involving increases in premium subsidies are considered. Copyright 2004, Oxford University Press.

Using a sample of 509 Kansas producers, we evaluate factors affecting adoption of forward pricing methods. We focus on producers' human capital accumulation and its effect on adoption of forward‐pricing techniques. Probit models are employed to evaluate producers' participation in educational programs and their forward‐pricing adoption decisions. Tobit models are employed to evaluate individual levels of adoption of these techniques in the marketing of wheat, corn, grain sorghum, soybeans, and cattle.