TESTING THE VIABILITY OF AREA YIELD INSURANCE FOR COTTON AND SOYBEANS IN THE SOUTHEAST

Abstract

GRP is essentially a put option on the NASS estimate of the county average yield. Purchasers of GRP are exposed to geographic basis risk. This study uses farm- and county-level yield data to examine the viability of area yield insurance for cotton and soybean farms in the southeastern U.S.Risk and Uncertainty,