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Abstract
This study seeks to provide a rigorous theoretical and empirical understanding of the effects of
exogenous geographic and climate-related factors on the first three moments of crop yields.
We hypothesize that exogenous geographic and climate factors that have beneficial effects on
crop production, such as better soils, less overheating damage, more growing season
precipitation and irrigation should make crop yield distributions less positively or more
negatively skewed. We employ a large crop insurance dataset for corn, soybean, and wheat to
find general support for the hypothesis. The novel empirical method optimally uses
correlations between the first three moments and thus significantly improves estimation
performance over existing methods.