Studies from Kansas State University Describe New Findings in Crop Insurance (Crop Insurance’s Impact On Commercial Bank Loan Volumes: Theory and Evidence): Agriculture – Crop Insurance

2023 JUL 28 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Investigators publish new report on Agriculture - Crop Insurance. According to news reporting out of Manhattan, Kansas, by NewsRx editors, research stated, “Crop insurance protects lenders by increasing the likelihood of loan repayment when revenue declines. We develop a theoretical mode that explains the role of crop insurance in agricultural lending and how impacts may be different for lenders that are not specialized in agricultural lending.”

Financial support for this research came from USDA Office of the Chief Economist.

Our news journalists obtained a quote from the research from Kansas State University, “We then test whether the total volume of production credit extended by commercial banks at the county level increases in response to crop insurance availability and whether the level of the response is related to bank specialization in agriculture. We use a novel difference-in-differences strategy based on some counties having a higher share of agricultural production that was not covered by Federal crop insurance in the 1990s.”

According to the news editors, the research concluded: “Crop insurance has a robust relationship with increased loan volumes during this period, especially in counties with fewer banks specialized in agriculture.”

This research has been peer-reviewed.

For more information on this research see: Crop Insurance’s Impact On Commercial Bank Loan Volumes: Theory and Evidence. Applied Economic Perspectives and Policy, 2023. Applied Economic Perspectives and Policy can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA. (Oxford University Press - http://www.oup.com/; Applied Economic Perspectives and Policy - aepp.oxfordjournals.org)

Our news journalists report that additional information may be obtained by contacting Jennifer Ifft, Kansas State University, Dept. of Agricultural Economics, Manhattan ks., United States. Additional authors for this research include Todd H. Kuethe, Gregory Lyons, Alexander Schultz and John Y. Zhu.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1002/aepp.13388. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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