Crop insurance is a frequent topic of debate among policymakers. This dissertation answers questions relevant to the current discussion about the cost of insurance, participation in the insurance program and the relationship between farm characteristics and crop insurance returns.

Both extensive (share of insured acres in total insurable acres) and intensive (coverage level choice) margin participation rates in the U.S. crop insurance program have increased due to generous subsidies. On a national scale, this program has been well rated to satisfy the actuarial fairness requirement by USDA Risk Management Agency. However, sizeable spatial heterogeneity remains across the Great Plains and Corn Belt regions. If subsidies were to be reduced in the future because of financial constraints, such heterogeneity might be detrimental to the sustainability of the crop insurance program. A central theme of this dissertation is to investigate how farmers make participation decisions when risk factors exist. In a separate but related line of work, this dissertation also explores the irrigation water usage in the Great Lakes region because farmers' irrigation behavior reflects their risk preferences and impacts their incentives for enrolling in the program. The dissertation consists of three essays on farmers' decisions regarding premium mispricing, basis risk, and irrigation water usage. The first essay proposes a novel resampling procedure to estimate farm-level actuarially fair premiums. The resampling procedure mainly contains two parts: (i) semi-parametric quantile regression; and (ii) rejection method. Many previous studies explore whether county-level mispricing exists based on the historical loss ratio records. However, we can identify farm-level mispricing by imputing actuarially fair premiums based on historical yield records, consistent with theory. We find that farmers with lower land quality cropland paid fewer premiums than they should, but a contrary case happens for farmers with higher land quality cropland. Empirical evidence shows farmers may be more concerned about mispricing than subsidy transfer. Regression results support a conclusion that such farm-level mispricing deters farmers' crop insurance demand. Our analysis sheds light on the policy-making that: (i) mispricing may be a substitution of subsidy so mitigating mispricing can maintain high participation while saving subsidies; and (ii) imputation of premiums based on historical yield records can apply.The second essay focuses on the impact of basis risk on participation rates in the U.S. crop insurance program. In recent years, basis risk has been increasingly recognized as an essential driver for deterring insurance uptake. Most research concentrates on index insurance contracts; however, few investigate the effect of mismatch between cash and futures markets on farmers' insurance decisions. We first build a conceptual model to show farmers' acreage response to basis risk within the expected utility framework. Next, we apply the Fractional Probit with Control Function for the empirical analysis and find that the effects of basis risk on participation rates are significantly negative for nearly all insurance contracts. Our analysis implies that: (i) to remove basis risk, revision for revenue contract may be considered; (ii) subsidy structure may be adjusted to be consistent with the underlying basis risk. The third essay investigates irrigation water usage in the Great Lakes region. Although the water conservation policy was implemented, there has been an upward trend in irrigation water demand from 2003 to 2018, including irrigated acres and total water usage. We employ firm-level irrigation data to examine what factors impact farmers' response to irrigation water usage. We find that: (i) price elasticities vary significantly according to model specifications and water costs; (ii) demand at both extensive (irrigated acres) and intensive (water application per acre) margins is input price inelastic; and (iii) price elasticities are homogeneous across crops but heterogeneous across states. For the policy-making, if there is a 10% tax on irrigation water cost, total water usage decreases by about 4% for corn and soybean, respectively.

The general theme of this dissertation is risk and uncertainty in agriculture, with each chapter addressing a specific topic related to agricultural risk and uncertainty. Chapter 2 examines the effects of production uncertainty on the types of contract structures used in specialty grain markets. A theoretical model of a contractual relationship between a monopsonistic processor and risk-neutral producers is presented. Two common contract structures, and their resulting effects on the sharing of production risk between buyer and seller, are compared. The spatial structure of yields and farm-level yield volatility are shown to have significant impacts on the processor's preferred choice of contract structure and expected profits of both the processor and farmers in the resulting equilibrium. Chapter 3 provides a critical look at a classic definition regarding the relationship between input use and risk, and attempts to reconcile an apparent paradox in the production literature. Experimental corn yield response data is used to estimate a stochastic production relationship between applied fertilizer, soil nutrient availability, and corn output. Optimal fertilizer application rates for risk-averse and risk-neutral producers are found using numerical methods. In addition to the empirical analysis, primary data collected through a farmer survey instrument, designed to elicit information from farmers regarding their risk attitudes and subjective beliefs regarding the relationship between risk and fertilizer use, is presented and compared with the results of the empirical analysis. Chapter 4 turns to the opportunities for managing weather risk using weather derivative markets. Developing regions are areas in which weather based risk management tools show significant potential. However, the success and long-term viability of insurance programs depends heavily on the availability of accurate and reliable historical data. The lack of this type of historical data for developing regions is one of the largest obstacles to insurance program development in these regions. A framework which utilizes statistical methods to estimate unbiased rainfall histories from sparse data is developed. To validate the methodology's usefulness, a drought insurance example is presented using a rich data set of historical rainfall at weather stations across the state of Iowa.

This book presents the first thorough economic analysis of current agricultural biotechnology regulation. The contributors, most of whom are agricultural economists working either in universities or NGOs, address issues such as commercial pesticides, the costs of approving new products, liability, benefits, consumer acceptance, regulation and its impacts, transgenic crops, social welfare implications, and biosafety.

In recent years the `farm to table' trend, the idea of understanding linkages between agricultural supply, food systems, and the food that is consumed, has been growing in popularity. This dissertation takes this idea a step further and examines topics on the progression from `farm to health outcomes.' It is important to recognize not only that food systems impact the way consumers eat, but that those food choices impact health outcomes and the way that medical care is consumed. The three essays of this dissertation examine three separate points along this continuum to improve the understanding of how food systems, food choice, health outcomes, and healthcare consumption interact. The first essay evaluates factors associated with school districts' decisions to participate in farm to school (FTS) programs. I leverage the USDA's Farm to School Census to analyze factors associated with FTS participation, the types of FTS activities implemented, and the challenges faced by participating school districts. I use spatially articulate data to estimate the spatial spillover effects of FTS participation. The results demonstrate that both school characteristics and local farm production factors are associated with FTS participation. The estimated spatial spillover effect is positive, suggesting that areas with a high penetration of FTS activities have lower barriers associated with implementing FTS programs. In my second essay, I shift to evaluating how parent-child pairs make the daily school lunch decision. Meals served in the National School Lunch Program (NSLP) are on average more healthful than alternatives, implying that increasing participation in the NSLP can improve nutrition for a large number of children. However, there is little understanding of the household decision process that determines participation in the NSLP. This study uses a parent-child choice experiment to assess the impact of both parent and child on NSLP participation. The results show that both have a significant impact on the chosen meal, where parents are concerned with meal palatability and nutrition, while the child only cares about palatability. The decision is also influenced by the household structure and demographics, and the inclusion of local foods in the school lunch option. My final essay evaluates how access to medical care can impact lifestyle choices. I evaluate if there is an ex ante moral hazard effect in health insurance markets. Ex ante moral hazard occurs when an individual takes on more risk knowing they will not bear the full cost of the consequences. In the case of health insurance, this could mean taking on unhealthful eating habits knowing that if these habits lead to illness the cost of care will be covered by insurance. Using panel data from the National Longitudinal Youth Survey 1997, I find evidence of an ex ante moral hazard effect in BMI, binge drinking, and smoking, suggesting that people take on less healthful behaviors, holding all else constant, when they have health insurance. The existence of ex ante moral hazard suggests that insurance companies can seek efficiency gains by finding ways to structure policies that diminish this moral hazard effect.