The optimal drought index for designing weather index insurance
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Author / Producer
Date
2021-07
Publication Type
Journal Article
ETH Bibliography
yes
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Abstract
Climate change increases the need for better insurance solutions that enable farmers to cope with drought risks. We design weather index insurance using drought indices based on precipitation, soil moisture and evapotranspiration as underlying drought index and compare their risk-reducing potential for winter wheat producers in Eastern Germany. In general, we find that all drought indices can reduce financial risk exposure. However, the largest risk reduction can be achieved if the underlying drought index is tailored individually for each farm. This implies that insurers should offer insurance with farm-specific underlying drought index.
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Publication status
published
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Book title
Journal / series
Volume
48 (3)
Pages / Article No.
573 - 597
Publisher
Oxford University Press
Event
Edition / version
Methods
Software
Geographic location
Date collected
Date created
Subject
Organisational unit
09564 - Finger, Robert / Finger, Robert
Notes
Funding
727520-2 - Towards SUstainable and REsilient EU FARMing systems (EC)