A local maximum likelihood model of crop yield distributions

Abstract

AbstractIn this note, we propose a local maximum likelihood estimator for spatially‐dependent distributions. Our estimator adopts the Poisson regression approach for density ratio models and incorporates spatial smoothing via local regression. We also present a method of smoothing parameter selection. We illustrate this easy‐to‐implement estimator with an application to the estimation of corn yield distributions of Iowa counties. The usefulness of the approach is further demonstrated via an application to the estimation of crop insurance premium.