Tobias Dalhaus

Last Name

Dalhaus

First Name

Tobias

ORCID

0000-0001-5853-0942

Show all metadata

Search Results

Publications1 - 10 of 21

Accounting for Geographic Basis Risk in Heat Index Insurance: How Spatial Interpolation Can Reduce the Cost of Risk
Leppert, Daniel; Dalhaus, Tobias; Lagerkvist, Carl-Johan (2021)
Weather, Climate, and Society
Extreme heat events cause periodic damage to crop yields and may pose a threat to the income of farmers. Weather index insurance provides payouts to farmers in the case of measurable weather extremes to keep production going. However, its viability depends crucially on the accuracy of local weather indices to predict yield damages from adverse weather conditions. So far, extreme heat indices are poorly represented in weather index insurance. In this study, we construct indices of extreme heat using observations at the nearest weather station and estimates for each county using three interpolation techniques: inverse-distance weighting, ordinary kriging, and regression kriging. Applying these indices to insurance against heat damage to corn in Illinois and Iowa, we show that heat index insurance reduces relative risk premiums by 27%–29% and that interpolated indices outperform the nearest-neighbor index by around 2%–3% in terms of relative risk reduction. Further, we find that the advantage of interpolation over a nearest-neighbor index in terms of relative risk reduction increases as the sample of weather stations is reduced. These findings suggest that heat index insurance can work even when weather data are spatially sparse, which delivers important implications for insurance practice and policy makers. Further, our public code repository provides a rich toolbox of methods to be used for other perils, crops, and regions. Our results are therefore not only replicable but also constitute a cornerstone for projects to come.
Einbussen durch Spätfröste im Apfelanbau
Dalhaus, Tobias; Schlenker, Wolfram; Blanke, Michael M.; et al. (2020)
Schweizer Zeitschrift für Obst- und Weinbau ~ 156
Durch Frost verursachte Qualitätseinbussen bei Äpfeln bewirken einen grösseren Anteil an den gesamten frostbedingten Erlösverlusten als Mengenverluste. Dies konnte basierend auf einer Analyse von langjährigen Daten aus dem Schweizer Betriebsnetz Support Obst Arbo (SOA) ermittelt werden.
Determinants of downside risk exposure of dairy farms
Finger, Robert; Dalhaus, Tobias; Allendorf, Joseph; et al. (2018)
European Review of Agricultural Economics
We investigate determinants of dairy producers’ risk exposure using a unique combination of foci on (i) downside risks, (ii) a holistic representation of revenues from milk and animal sales, (iii) climatic extremes and (iv) the role of animal health. A sample of German dairy farms reveals that animal health and heat stress indicators influence mean and semi-variance of revenues. For instance, heat stress exposure reduces expected milk revenues significantly. In the case of animal health-related indicators, our results show trade-offs between expected revenues and downside risks. Furthermore, variabilities in revenues from milk and animal sales are significantly interrelated.
Revisiting the diversification and insurance relationship: Differences between on- and off-farm strategies
Knapp, Ladina; Wüpper, David Johannes; Dalhaus, Tobias; et al. (2021)
Climate Risk Management
Crop insurance is an important instrument for farmers to cope with climate risks. Yet, also, diversification plays a crucial role. The use of crop insurance and diversification is interrelated. For example, an increasing support and uptake of insurance solutions may discourage farmers to take diversification measures on the farm, given that they now have an insurance dealing with risks. This may have unintended consequences, such as biodiversity decline. We examine the relationships between seven different kinds of income diversification and the uptake of crop insurance. Theoretically, both substitutive and complementary relationships are possible. The reason is that, depending on their preferences and constraints, farmers choose income bundles that optimally balance profits and risks. Here we provide the first systematic empirical examination of this issue. Our analysis is based on our own survey data from 1176 Swiss fruit growers. We consider on- and off-farm diversification strategies, namely inter-varietal diversity, agro-tourism, processing and direct marketing of products, creation of financial reserves for bad times, forestry work, off-farm investment, off-farm income and their association with insurance uptake. In line with our theoretical reasoning, we do indeed find both substitutive and complementary relationships. In general, on-farm diversification is associated with positive insurance demand, whereas off-farm diversification has a negative association.
Behavioral weather insurance: Applying cumulative prospect theory to agricultural insurance design
Dalhaus, Tobias; Barnett, Barry; Finger, Robert (2017)
Behavioral weather insurance: Applying cumulative prospect theory to agricultural insurance design under narrow framing
Dalhaus, Tobias; Barnett, Barry J.; Finger, Robert (2020)
PLoS ONE
Experience across many countries shows that, without large premium subsidies, crop insurance uptake rates are generally low. In this article, we propose to use the cumulative prospect theory to design weather insurance products for situations in which farmers frame insurance narrowly as a stand-alone investment. To this end, we introduce what we call “behavioral weather insurance” whereby insurance contract parameters are adjusted to correspond more closely with farmers’ preferences. Depending on farmers’ preferences, we find that a stochastic multiyear premium increases the prospect value of weather insurance, while a zero deductible design does not. We suggest that insurance contracts should be tailored precisely to serve farmers’ needs. This offers potential benefits for both the insurer and the insured.
Farmer Protests in Europe 2023–2024
Finger, Robert; Fabry, Anna; Kammer, Marie; et al. (2024)
EuroChoices
In 2023–2024, farmer protests swept across Europe, with tractors blocking roads and supermarkets, drawing significant media attention. Unlike previous protests, these events spread continent-wide, suggesting a contagion effect. This paper documents the surge in farmer protests, explores their triggers and underlying causes, and emphasizes the need for a just transition to sustainable food systems. The protests were sparked by proposed policy changes, tighter environmental regulations, perceived pressures on farm incomes and increased trade competition. However, the root causes varied by country. Swift policy responses at both national and EU levels included retracting controversial measures like the Sustainable Use of Pesticides Regulation, but these actions also hindered key initiatives for transitioning to more sustainable agri-food systems. Moving forward, a comprehensive public debate on the future of Europe's agri-food systems is crucial, focusing on balancing environmental sustainability with the economic viability of agriculture. A major political challenge will be moving beyond simplistic dichotomies to develop a vision for a food system that fosters synergies between farmer interests as well as environmental and social objectives.
Temperature effects on crop yields in heat index insurance
Bucheli, Janic; Dalhaus, Tobias; Finger, Robert (2022)
Food Policy
Heat can cause substantial yield losses in crop production and climate change is increasing the risk of this kind of damage. Weather index insurance can help to reduce the financial losses resulting from heat exposure. This paper introduces crop-specific payout functions based on restricted cubic splines in heat index insurance. The use of restricted cubic splines is a cutting-edge method to reflect empirically estimated temperature effects on crop yields and to estimate temperature-related yield losses. The integration of these temperature effects in payout functions facilitates insurance design and allows hourly temperatures to be used as the underlying index. An empirical analysis is used to assess heat stress effects for a panel of East German winter wheat and winter rapeseed producers, to calibrate insurance contracts accordingly and simulate the resulting risk reducing capacities. We find that the insurance scheme introduced here leads to statistically and economically significant out-of-sample risk reducing capacities for farmers, i.e. risk premiums are reduced by up to approximately 20% at the median, in comparison to the uninsured status and at the actuarially fair premium. Moreover, we highlight that policy-makers can support the cost-efficient provision of market-based weather index insurance by fostering data collection and data provision.
Weather insurance in European crop and horticulture production
Bucheli, Janic; Conrad, Nina; Wimmer, Stefan; et al. (2023)
Climate Risk Management
Weather risks threaten food production and put farms’ profitability at risk. Insurance solutions can compensate for the resulting financial losses and thereby serves as important risk management tool. While insurance providers in Europe have recently largely expanded the number and scope of offered weather insurance solutions, this remained undocumented in scientific literature. We here provide a structured assessment of agricultural insurance products that are on the market to cover weather risks in crop and horticulture production in dynamic European insurance markets, focusing on Austria, France, Germany, Italy, Spain and Switzerland. We systematically collect information on supplied insurance products (N = 107) and find large diversity in market concentrations, offered products, insured weather risks, and political market interventions. We find that for most economically relevant weather risks (especially for hail), insurance solutions are available to farmers, but we identify certain insurance protection gaps (e.g., flood in Germany). Additionally, drought and heat risks seem underrepresented in current insurance products, especially given their economic relevance. Indemnity insurance (where payouts are based on assessed losses) is offered most frequently, but weather index insurance (where payouts depend on the realization of an index, such as cumulative precipitation) is also increasingly available in Europe. Most of current weather index insurance solutions have a unique design, indicating a preference to stand out from the competition, and we observe little knowledge spillovers between markets. There are different levels of political market intervention and in particular a trend to introduce premium subsidies and towards a convergence of premium subsidy levels between markets. We highlight the need to align any political market intervention to other policy goals and to the transition to a more sustainable agriculture. Finally, we underline the important role of research in improving current insurance systems.
The Effects of Extreme Weather on Apple Quality
Dalhaus, Tobias; Schlenker, Wolfram; Blanke, Michael M.; et al. (2020)
Scientific Reports
A large literature has documented the effects of weather on agricultural yields. However, weather not only impacts the quantity produced, but also the quality of the product. Due to data limitations, the quality effects have primarily been studied using lab experiments for specific attributes, and the financial implications for farmers of a quality effect are less clear. Using a unique longitudinal micro-level data set of Swiss apple orchards that include information on both the quantity produced as well as the quality, we show that the latter can have an even larger effect on farm revenue. Ignoring the quality of the harvested product substantially biases the impact of weather extremes on agricultural income and the potential effects of climate change. Our quality measure is the orchard-year specific price shock. If an orchard gets a lower price for its specific apple variety compared to previous years and compared to other orchards in the same year, we observe the market’s valuation of its inferior quality accounting for overall price movements (other orchards growing same variety that year) as well as orchard specific factors (orchard fixed effects). We find that spring frost events induce farm gate price drops and thus revenue reductions of up to 2.05% per hour of exposure.

Publications1 - 10 of 21

Tobias Dalhaus

Last Name

First Name

ORCID

Organisational unit

Filters

Search Results