The "Spot Check List" (SCL) is an important tool developed to help detect and deter fraud, waste, and abuse in the U.S. crop insurance program. This article examines whether the SCL program affects producers' claims filing behavior and provides insights on the effectiveness of this program. Using proprietary, county-level SCL data and panel data econometric procedures (which control for both observable and unobservable confounding factors), we find evidence that counties with producers included in the SCL tend to have better actuarial performance (i.e., lower indemnity payment amounts) after being informed about their listing on the SCL. This indicates that the SCL procedure is a valuable tool for maintaining integrity in the federal crop insurance program.
This article examines the heterogeneous impacts of the "Spot Check List" (SCL) on producer claims filing behavior across five major crops. Our proposed empirical approach takes into account all the salient data features, namely, state dependence, nonnegativeness of the dependent variable, two-way fixed effects, observed heterogeneity, as well as potentially endogenous control variables. Our results show that the SCL program is effective in reducing the amount of claims filed by producers of corn, soybeans, and cotton, but there is no evidence that it has a statistically significant impact on producers of wheat and tobacco.
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