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Study claims Congressional Budget Office may have overstated the cost of crop insurance

New data by agricultural economist Art Barnaby indicates that the Congressional Budget Office may have overstated the cost of federal crop insurance.
Barnaby concludes that price volatility, the amount of uncertainty or risk in the size of the changes of a security’s value, drives premium cost more than market price. If implied volatility (estimated volatility) decreases then the resulting decrease in premiums will create lower premium support costs equaling lower taxpayer costs.
The Risk Management Agency’s rating system uses the market implied volatility for estimating the price risk of insuring the crop. However, higher volatility does not always ...

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