The authors are grateful to Vince Breneman and Ryan Williams for providing data and to Steve Wallander for reviewing this article.
Purpose – The purpose of this paper is to consider how the federal crop insurance (FCI) program influences farm debt use, one of the key financial decisions made by farm operators. Design/methodology/approach – Using data from the nationally representative Agricultural Resource Management Survey, the paper implements a propensity score matching model of the impact of FCI participation on various measures of farm business debt use. To account for the simultaneity of financial decisions, the paper further tests this relationship using a seemingly unrelated regression model. Findings – FCI participation is associated with an increase in use of short-term farm debt, but not long-term debt, consistent with risk balancing behavior and current trends in the farm sector. Research limitations/implications – In addition to risk balancing, the results are also consistent with credit constraints or lender preferences. The paper cannot fully establish causality between crop insurance participation and short-term debt levels. Future research should address these limitations. Practical implications – Agricultural lending standards are generally conservative and the farm sector as a whole currently has historically low leverage, which implies that an increase in debt use may not be a threat to the financial health of the farm sector. Social implications – The results indicate that the reduction in total risk facing the farm sector is significantly less than the decline in risk provided by FCI, which is an important consideration for policymakers. Originality/value – This is the first paper to use an econometric model to analyze the relationship between FCI and farm debt use decisions. This paper can inform future research on the FCI program and farm financial decisions.
Kuethe T. H. and Pede V. O. Regional housing price cycles: a spatio-temporal analysis using US state-level data, Regional Studies. A study is presented of the effects of macroeconomic shocks on housing prices in the Western United States using quarterly state-level data from 1988:1 to 2007:4. The study contributes to the existing literature by explicitly incorporating locational spillovers through a spatial econometric adaptation of vector autoregression (SpVAR). The results suggest these spillovers may Granger cause housing price movements in a large number of cases. SpVAR provides additional insights through impulse response functions that demonstrate the effects of macroeconomic events in different neighbouring locations. In addition, it is demonstrated that including spatial information leads to significantly lower mean-square forecast errors. [image omitted] Kuethe T. H. et Pede V. O. La variation cyclique regionale du prix du logement: une analyse geographico-temporelle des donnees sur les etats aux E-U, Regional Studies. A partir des donnees trimestrielles au premier trimestre de 1988 jusqu'au quatrieme trimestre de 2007, on presente ici une etude des effets des chocs macroeconomiques sur le prix du logement dans le sud-ouest des Etats-Unis. L'etude contribue a la documentation actuelle en incorporant explicitement les retombees geographiques par moyen d'une adaptation spatiale econometrique de l'autoregression vectorielle (spVAR). Les resultats laissent supposer que ces retombees pourraient entrainer une variation du prix du logement en de nombreuses situations. SpVAR fournit des apercus supplementaires par moyen des fonctions de reponse spontanee qui montrent l'impact des chocs macroeconomqiues dans divers endroits voisins. En plus, on demontre que l'inclusion des donnees spatiales reduit sensiblement les erreurs quadratiques moyennes prevues. Prix du logment Autoregression vectorielle Econometrie spatiale Kuethe T. H. und Pede V. O. Regionale Hauspreiszyklen: eine raumlich-zeitliche Analyse von Daten auf US-Bundesstaatsebene, Regional Studies. In dieser Studie verdeutlichen wir mit Hilfe von Quartalsdaten auf Bundesstaatsebene im Zeitraum vom ersten Quartal 1988 bis zum vierten Quartal 2007 die Auswirkungen makrookonomischer Schocks auf die Hauspreise im Westen der USA. Die Studie tragt zur vorhandenen Literatur bei, indem sie standortspezifische Ubertragungen mit Hilfe einer raumlichen okonometrischen Anpassung der Vektor-Autoregression (SpVAR) explizit einbezieht. Aus den Ergebnissen geht hervor, dass diese Ubertragungen in vielen Fallen Granger-kausal auf Veranderungen bei den Hauspreisen wirken konnen. Die SpVAR bietet zusatzliche Einblicke in Form von Impulsantwort-Funktionen, die die Auswirkungen makrookonomischer Ereignisse in verschiedenen angrenzenden Standorten nachweisen. Zusatzlich wird nachgewiesen, dass die Einbeziehung raumlicher Informationen zu signifikant niedrigeren mittleren quadratischen Prognosefehlern fuhrt. Hauspreise Vektorautoregression (VAR) Raumliche Okonometrie Kuethe T. H. ...
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