The optimal drought index for designing weather index insurance

Janic Bucheli*, Tobias Dalhaus, Robert Finger

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

34 Citations (Scopus)


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 languageEnglish
Article numberjbaa014
JournalEuropean Review of Agricultural Economics
Publication statusPublished - 13 Sept 2020


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


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