Risk in agriculture : a study of crop yield distributions and crop insurance

Agriculture is a business fraught with risk. Crop production depends on climatic, geographical, biological, political, and economic factors, which introduce risks that are quantifiable given the appropriate mathematical and statistical methodologies. Accurate information about the nature of historical crop yields is an important modeling input that helps farmers, agribusinesses, and governmental bodies in managing risk and establishing the proper policies for such things as crop insurance. Explicitly or implicitly, nearly all farm decisions relate in some way to the expectation of crop yield. Historically, crop yields are assumed to be normally distributed for a statistical population and for a sample within a crop year. This thesis examines the assumption of normality of crop yields using data collected from India involving sugarcane and soybeans. The null hypothesis (crop yields are normally distributed) was tested using the Lilliefors method combined with intensive qualitative analysis of the data. Results show that in all cases considered in this thesis, crop yields are not normally distributed.

Department dc:contributor.department

Massachusetts Institute of Technology. Engineering Systems Division.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2006

Author dc:creator

• Gayam, Narsi Reddy

Advisor dc:contributor.advisor

• David Brock.

• Engineering Systems Division.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/35537

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/35537