Interest is growing in weather insurance within the agricultural sector but its use has been limited by the difficulty in defining the appropriate weather event and the lack of agreement on how to price the product. In this paper we develop a new insurance pricing method for weather insurance...

This paper developed an economic framework to analyze the economic impacts of an ECP on trade flows within the context of a partial equilibrium approach which assumes that non-payment risks are distinct between selling at home and abroad based on difficulties and expense in recovering...

In this paper we develop a theoretical model of input supply by agricultural producers who purchase crop insurance and so who may engage in moral hazard. We show, through simulations, that a combination of partial insurance coverage combined with a mnimum standard for input use may reduce...

The purpose of this paper is to provide a specific test of Boucher, Carter et al.(2008) framework on risk rationing. The data were collected through a survey of 730farm households in Shaanxi province conducted in November 2010. We comparefactor associated with risk rationed, quantity rationed...

This paper presents preliminary results on the possible demand for weather insurance in China. Results from 1,564 farm households from Western and Central China between October 2007 and October 2008 suggest that the greater risk for farmers is drought followed by excessive rain. Heat is less...

The main motivation for this paper is the recognition of the fact that asymmetric information is the form of moral hazard and adverse selection results in sizeable efficiency losses. These costs are passed back to producers in the form of excessively high premium rates and also passed back to...

This paper estimates single-index model (SIM) beta coefficients for the major cash crops of Ontario's agricultural-producing counties. Beta coefficients are estimated using per acre gross revenues weighted by (1) the proportion of each crop planted in each county and (2) equal weights. The...

This article examines farm operating risks and cash-rent determination through the use of the efficient set mathematics. The efficient set mathematics proves to be a pragmatic approach to characterizing operating risks, and the relationships between operating risks and cash-rent determination....

This paper presents a model and framework for pricing degree-day weather derivatives when the weather variable is a non-traded asset. Using daily weather data from 1840-1996 it is shown that a degree-day weather index exhibits stable volatility and satisfies the random walk hypothesis. The paper...

This paper presents a model and framework for pricing degree-day weather derivatives when the weather variable is a non-traded asset. The paper compares the options prices from the recommended model and compares it to a typical insurance-type model.