The optimal drought index for designing weather index insurance

Janic Bucheli; Tobias Dalhaus; Robert Finger

doi:10.1093/erae/jbaa014

The optimal drought index for designing weather index insurance

Janic Bucheli^*, Tobias Dalhaus, Robert Finger

^*Corresponding author for this work

Business Economics

Research output: Contribution to journal › Article › Academic › peer-review

24 Citations (Scopus)

Abstract

Weather index insurance can mitigate financial climate risks. This removal of financial downside risks helps to overcome poverty traps, improves farmers’ well being and facilitates economic growth in agriculture. We empirically test different drought indices regarding their risk reducing potentials for weather index insurance. Results indicate that the drought index with greatest risk reduction is farm individual.

Original language	English
Article number	jbaa014
Journal	European Review of Agricultural Economics
DOIs	https://doi.org/10.1093/erae/jbaa014
Publication status	Published - 13 Sept 2020

Keywords

drought indices
drought risks
index design
index-based insurance
quantile regression

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

Access to Document

10.1093/erae/jbaa014Licence: CC BY-NC-ND

https://edepot.wur.nl/533073Licence: CC BY-NC-ND

SURE-Farm: Towards SUstainable and REsilient EU FARMing systems
1/06/17 → 31/05/21
Project: EU research project

Cite this

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title = "The optimal drought index for designing weather index insurance",

abstract = "Weather index insurance can mitigate financial climate risks. This removal of financial downside risks helps to overcome poverty traps, improves farmers{\textquoteright} well being and facilitates economic growth in agriculture. We empirically test different drought indices regarding their risk reducing potentials for weather index insurance. Results indicate that the drought index with greatest risk reduction is farm individual.",

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AU - Dalhaus, Tobias

AU - Finger, Robert

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AB - Weather index insurance can mitigate financial climate risks. This removal of financial downside risks helps to overcome poverty traps, improves farmers’ well being and facilitates economic growth in agriculture. We empirically test different drought indices regarding their risk reducing potentials for weather index insurance. Results indicate that the drought index with greatest risk reduction is farm individual.

KW - drought indices

KW - drought risks

KW - index design

KW - index-based insurance

KW - quantile regression

U2 - 10.1093/erae/jbaa014

DO - 10.1093/erae/jbaa014

M3 - Article

SN - 0165-1587

JO - European Review of Agricultural Economics

JF - European Review of Agricultural Economics

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ER -

The optimal drought index for designing weather index insurance

Abstract

Keywords

UN SDGs

Access to Document

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Projects

SURE-Farm: Towards SUstainable and REsilient EU FARMing systems

Cite this