Developing and Pricing Precipitation Insurance
Production agriculture and agribusiness are exposed to many weather-related risks. Recent years have seen the emergence of an increased interest in weather-based derivatives as mechanisms for sharing risks due to weather phenomena. In this study, a unique precipitation derivative is proposed that al...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Western Agricultural Economics Association
2001-07-01
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| Series: | Journal of Agricultural and Resource Economics |
| Subjects: | |
| Online Access: | https://ageconsearch.umn.edu/record/31155 |
| _version_ | 1828871840714457088 |
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| author | Steven W. Martin Barry J. Barnett Keith H. Coble |
| author_facet | Steven W. Martin Barry J. Barnett Keith H. Coble |
| author_sort | Steven W. Martin |
| collection | DOAJ |
| description | Production agriculture and agribusiness are exposed to many weather-related risks. Recent years have seen the emergence of an increased interest in weather-based derivatives as mechanisms for sharing risks due to weather phenomena. In this study, a unique precipitation derivative is proposed that allows the purchaser to specify the parameters of the indemnity function. Pricing methods are presented in the context of a cotton harvest example from Mississippi. Our findings show a potential for weather derivatives to serve niche markets within U.S. agriculture. |
| first_indexed | 2024-12-13T06:41:40Z |
| format | Article |
| id | doaj.art-be83440248c44c1e93faac3d8418fb81 |
| institution | Directory Open Access Journal |
| issn | 1068-5502 2327-8285 |
| language | English |
| last_indexed | 2024-12-13T06:41:40Z |
| publishDate | 2001-07-01 |
| publisher | Western Agricultural Economics Association |
| record_format | Article |
| series | Journal of Agricultural and Resource Economics |
| spelling | doaj.art-be83440248c44c1e93faac3d8418fb812022-12-21T23:56:25ZengWestern Agricultural Economics AssociationJournal of Agricultural and Resource Economics1068-55022327-82852001-07-0126126127410.22004/ag.econ.3115531155Developing and Pricing Precipitation InsuranceSteven W. MartinBarry J. BarnettKeith H. CobleProduction agriculture and agribusiness are exposed to many weather-related risks. Recent years have seen the emergence of an increased interest in weather-based derivatives as mechanisms for sharing risks due to weather phenomena. In this study, a unique precipitation derivative is proposed that allows the purchaser to specify the parameters of the indemnity function. Pricing methods are presented in the context of a cotton harvest example from Mississippi. Our findings show a potential for weather derivatives to serve niche markets within U.S. agriculture.https://ageconsearch.umn.edu/record/31155cross-hedgingprecipitation insurance riskriskweather derivative |
| spellingShingle | Steven W. Martin Barry J. Barnett Keith H. Coble Developing and Pricing Precipitation Insurance Journal of Agricultural and Resource Economics cross-hedging precipitation insurance risk risk weather derivative |
| title | Developing and Pricing Precipitation Insurance |
| title_full | Developing and Pricing Precipitation Insurance |
| title_fullStr | Developing and Pricing Precipitation Insurance |
| title_full_unstemmed | Developing and Pricing Precipitation Insurance |
| title_short | Developing and Pricing Precipitation Insurance |
| title_sort | developing and pricing precipitation insurance |
| topic | cross-hedging precipitation insurance risk risk weather derivative |
| url | https://ageconsearch.umn.edu/record/31155 |
| work_keys_str_mv | AT stevenwmartin developingandpricingprecipitationinsurance AT barryjbarnett developingandpricingprecipitationinsurance AT keithhcoble developingandpricingprecipitationinsurance |