Agricultural policy is an important component of risk management in U.S. agriculture. This dissertation focuses on various aspects of this topic. In the first essay, we find that baselines generated for policy analysis can serve as viable forecasts of season average farm prices. Specifically, simple alternatives of a time-series model and a futures-based forecast failed to perform better or contain all of the information for corn and soybean prices in the baselines. The result is that the baselines provide a resource to the public beyond just their use for scenario analysis. Crop underinsurance is examined in the second essay. Producers purchase some crop insurance options that expected utility theory (EUT) suggests they should not select. The essay examines several of the explanations that have been proposed for this outcome and finds that a budget constraint, asymmetric information and cumulative prospect theory under the correct condition are plausible explanations. Analysis from a survey finds that producers in the Plains and the South are more likely to underinsure. Furthermore, producers more sensitive to premiums are less likely to underinsure. The survey used in the second essay also revealed that 64 percent of respondents believe that they lose money on crop insurance over time. Given program design and past performance, this result is surprising. The third essay examines this result and finds that a recent indemnity is a significant factor in explaining this outcome, which is evidence of recency bias in the perception of crop insurance. However, we fail to find this perception is related to actual crop insurance decisions.Includes bibliographical references
