Purpose: Satellite-based weather index insurance has recently been considered in order to reduce the high basis risk of station-based weather index insurance. However, the use of satellite data with a relatively low spatial resolution has not yet made it possible to determine the satellite...

Purpose: Urbanization is a main driver of the transformation from agricultural-based economies to service-based economies. At the same time, urbanization might also alter preferences and attitudes such as risk and time preferences that contribute to economic growth and foster this transition....

Purpose The purpose of this paper is to empirically investigate the influencing factors of loan demand in agriculture. With the structural changes that agriculture is undergoing and the accordingly higher financing requirements and volumes, the analysis of loan demand in agriculture is of...

Purpose: The purpose of this paper is to check which role-bounded rationality might play as an explanation for farmers’ missing willingness to adopt weather index insurance (WII). WII is an innovative risk management instrument that causes low administration and regulation costs. Moreover,...

Purpose – Often farmers do not switch to a new bank even if it offers better interest rates than the house bank. This can be attributed partly to transaction costs, and partly to bounded rationality. The purpose of this paper is to better understand farm borrowers by analyzing the role of...

Purpose – The purpose of this paper is to analyze the extent to which weather index‐based insurances can contribute to reducing shortfall risks of revenues of a representative average farm that produces corn or wheat in the North China Plain (NCP). The geographical basis risk is quantified...

Purpose – Using a unique dataset of a commercial microfinance institution (MFI) in Tanzania, the purpose of this paper is to investigate first whether agricultural firms have a different probability to get a loan and whether their loans are differently volume rationed than loans to...

Purpose – Since the 1990s, there has been a discussion about the use of weather index‐based insurance, also called weather derivatives, as a new instrument to hedge against volumetric risks in agriculture. It particularly differs from other insurance schemes by pay‐offs being related to...

This study examines rainfall variability and its implications for wheat production risk in northeast Germany. The hedging effectiveness of rainfall options and the role of geographical basis risk are analyzed using a daily precipitation model. Simpler pricing methods such as the burn analysis...

Since the mid‐1990s, agricultural economists have discussed the relevance of index‐based insurances, also called “weather derivatives”, as hedging instruments for volumetric risks in agriculture. Motivated by the question of how weather derivatives should be priced for agricultural...