I construct index-based weather insurance contracts with optimal hedging effectiveness for the insured or maximal profits for the insurer. In contrast to earlier work, I refrain from imposing functional form assumptions on the stochastic relationship between weather and yield and from...

Climate change with increasing climate variability is likely to alter risks in agriculturalproduction. The effectiveness of using weather derivatives to hedge against drought risks forrain-fed grain maize production was investigated for current (1981-2003) and future (2070-2100) climates in...