Agriculture Reference
In-Depth Information
Table 6.3
Definition of variables
Dependent variables
CONTRACT
=
1 if contract was a cropshare contract.
=
0 if contracts was cash rent.
Independent variables
BUILDING VALUE
=
total value in $1,000s of all owned buildings multiplied by the equity in the farm.
CORN, OATS,
SOYBEANS, WHEAT
=
1 if corn (oats, soybeans, wheat) was the major income-producing crop;=0ifnot.
COUNTY CV
=
coefficient of variation for crop yield in a county.
COUNTY MEAN
=
mean crop yield in a county.
COUNTY STD
=
standard deviation of crop yield in a county.
EQUIPMENT VALUE
=
total value in $1,000s of all owned equipment multiplied by the equity in the farm.
FUTURES MARKET
=
1 if there is an organized futures market for the crop (barley, canola, cotton, corn,
oats, rice, soybeans, sugar, wheat);
=
0 if there is no futures market.
INSTITUTION
=
1 if the landowner is an institution (available only for Nebraska and South Dakota
farmer samples);
=
0 if landowner is an individual.
REGIONAL CV
=
coefficient of variation for crop yield in a region.
REGIONAL MEAN
=
mean crop yield in a region.
REGlONAL STD
=
standard deviation of crop yield in a region.
ROW CROP
=
1 if row crop (corn, sugar beets, sugarcane, soybeans, sorghum);
=
0 if not a row crop (wheat, oats, barley).
STATE CV
=
coefficient of variation for crop yield in a state or province.
TREES
=
1 if fruit was grown (e.g., apples, pears, etc.);
=
0 if no fruit was grown.
WEALTH
=
total value of all owned buildings, equipment, and land multiplied by the equity in
the farm.
A describes the data sources, shows summary statistics, explains calculations, and shows
that these samples compare favorably to state- and province-wide averages.
Preliminary Findings: Crop Yield Variability and Contract Type
The most famous risk-sharing prediction (6.5) is that share contracts are more likely to
be chosen in settings where uncertainty is high. A simple, preliminary way to identify a
risky setting is to classify crops by their yield variability. We examine this prediction by
considering, first, state- and province-wide measures of risky crops, and, second, how risky
crops influence contract choice at the farm level.
Table 6.4 presents the region-wide coefficient of variation (CV) in yield for the major
crops in British Columbia, Louisiana, Nebraska, and South Dakota. The coefficient of
variation is preferred to standard deviation for this test for two reasons. First, the coefficient
