UC Davis Agricultural and Resource Economics

Alan Ker, University of Guelph

On the Use of Historical NASS County Yield Data

Date and Location

Thursday, December 7, 2017, 4:10 PM - 5:30 PM
ARE Library, 4101 Social Sciences and Humanities

Abstract

County crop yield data from United States Department of Agriculture - National Agricultural Statistics Service (USDA-NASS) has and continues to be extensively used in the literature. Examples include the evaluation of rating methodologies for crop insurance, modeling the climate-yield relationship, forecasting the effects of a changing climate on yields and land-use, and, productivity analysis. In the majority of these, the yield data are detrended and adjusted for possible heteroskedasticity and then assumed to be independent and identically distributed. For most major crop-region combinations, county yield data exist from 1955 onwards. Over this period, there have been significant innovations in both seed and farm management technologies and they have likely altered more than the first two moments of the yield data generating process. As a result, the identically distributed assumption would not hold. This manuscript considers the question of how much historical yield data should be used in empirical analyses. While the answer is dependent on the crop, region, econometric methodology, and chosen loss function, nonetheless, we tend to find yield data more than 30 to 40 years in the past can increase estimation error. Given the prospect of discarding data is unappetizing, we also present and evaluate alternative econometric methodologies that can utilize data from like (not identical) data generating processes.

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