Weather risk management in agriculture using weather derivatives
Martina Bobrikova
The purpose of this paper is to examine weather risk management by application of weather derivatives in agriculture and evaluate the hedging efficiency. Agriculture is a sector highly sensitive to meteorological elements that affect the yield of many crops. The underlying weather indices depending on temperature, rainfall and wind speed are analysed. Pricing follows the index modelling method using the Burn analysis valuation for fair premium calculation. The proposal of hedging strategies against excess rainfall in the crop cycle using weather options for Kosice region in the east of Slovakia is investigated and discussed. Results show that the weather derivatives application in weather risk management reduced the yield volatility in agriculture.
Year of publication: |
2022
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Authors: | Bobrikova, Martina |
Published in: |
Italian review of agricultural economics. - Florence, Italy : Firenze University Press, ISSN 2281-1559, ZDB-ID 3031131-7. - Vol. 77.2022, 2, p. 15-26
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Subject: | Weather Risk Management | weather option | rainfall index | burn analysis | hedging efficiency | Wetter | Weather | Risikomanagement | Risk management | Derivat | Derivative | Hedging | Elementarschadenversicherung | Natural disaster insurance | Theorie | Theory | Agrarversicherung | Agricultural insurance | Landwirtschaft | Agriculture |
Saved in:
freely available
Type of publication: | Article |
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Type of publication (narrower categories): | Aufsatz in Zeitschrift ; Article in journal |
Language: | English |
Other identifiers: | 10.36253/rea-13416 [DOI] |
Classification: | G13 - Contingent Pricing; Futures Pricing |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10013499476
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