Limitations and Future Work 85 - The impact of crop insurance participation on farmers' use of

1. INTRODUCTION 1

7.3. Limitations and Future Work 85

There are a few limitations to this research. First, despite of its nationally representativeness and comprehensiveness, the ARMS data do not contain details about farmers’ use of crop insurance, information such as the types of insurance, crops covered under insurance or the coverage level is not available. Therefore, only the farm-‐level insurance adoption dummy could be utilized. With more information, future analyses could be done at the crop level, and the impacts of different types of crop insurance might be distinguished so that the estimates are more accurate.

Second, this thesis only focuses on marketing contract use to represent farmers’ use of private-‐market risk management strategies. More risk management tools such as futures and options could be included in future work.

Lastly, some earlier studies suggest that farmers use forward contracts for price enhancement rather than protecting against price risks. (e.g., Musser & Patrick, 2002) These two different motivations to use marketing contracts are indistinguishable in this thesis. Given more information, it might be possible for further studies to distinguish between different objectives of forward contracting.

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