Climate Risk Management · 2015 · 98 citations · 53 references
BusinessAgricultural EconomicsInsuranceAgricultural InsuranceInsurance EconomicsRisk AnalysisAgricultural Risk AssessmentCrop InsuranceInsurance Contract DesignInsurance PolicyInsurance RiskWeather Index InsuranceAgricultural Index InsuranceDownside Risk AnalysisGrowing Degree DaysIndex DesignIndex Insurance DesignOptimal Insurance DesignQuantile RegressionWeather Index Risk
This study investigates the performance of a flexible index design for weather index-based insurances using farm-level panel data on wheat production from Kazakhstan. The proposed flexible design is a generic framework that uses Growing Degree Days to determine annual variable start and end dates for the insured period. This approach reflects the progress of phenological plant growth phases more accurately than fixed periods and hence is expected to reduce the basis risk of the index insurance. In addition, we develop an economic framework that focuses on the role of downside risks and apply Quantile Regression to tailor optimal insurance specifications. This framework is then used to compare the downside risks associated with the use of flexible and fixed insurance periods. The results show that the introduction of flexibility in the index design leads to a reduction in farmers’ downside risk exposure and to a more efficient contract design.
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The impact of temperature variability on wheat yields
Senthold Asseng, Ian Foster, Neil C. Turner · Global Change Biology · 2010 · 1.1K citations
Agriculture, Agronomy, Crop Sciences +17
Foundations of Portfolio Theory
Harry M. Markowitz · The Journal of Finance · 1991 · 955 citations
Approximating Expected Utility by a Function of Mean and Variance
Haim Levy, H M Markowtiz · American Economic Review · 1979 · 899 citations
Social Sciences, Economics, Finance +17