Farmers Facing Risk: Evidence from Ethanol Plant Expansion in the Midwest
Job Market Paper · Solo-authored
A growing literature attributes declining farm numbers and increasing average farm size to crop-insurance expansion. I argue that these patterns may instead reflect underlying price risk and heterogeneous risk aversion. Using a representative-farmer model and plausibly exogenous local corn-price exposure generated by ethanol-plant expansion, I estimate how price risk affects farm turnover and agricultural land markets.
