Weather risk management in ski resorts: Financial hedging and geographical diversification

International Journal of Hospitality Management

Volumn 30, Issue 2, 2011, Pages 301-311

  Tang, Chun Hung Hugo ^a   Jang, SooCheong Shawn ^a  

^a PURDUE UNIVERSITY   (United States)

Author keywords

Financial hedging; Geographical diversification; Risk management; Ski resort; Weather risk

Indexed keywords

EID: 79751533743     PISSN: 02784319     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.ijhm.2010.09.012     Document Type: Article

References (38)

1. Allayannis G., Ihrig J., Weston J.P. Exchange-rate hedging: financial versus operational strategies. American Economic Review 2001, 91(2):391-395.
2. Allayannis G., Weston J.P. The use of foreign currency derivatives and firm market value. Review of Financial Studies 2001, 14(1):243-276.
3. Beaulieu J.J., Miron J.A. A cross country comparison of seasonal cycles and business cycles. The Economic Journal 1992, 102(413):772-788.
4. Brockett P.L., Wang M., Yang C. Weather derivatives and weather risk management. Risk Management and Insurance Review 2005, 8(1):127-140.
5. Cao M., Wei J. Weather derivatives valuation and market price of weather risk. Journal of Futures Markets 2004, 24(11):1065-1089.
6. Castelino M.G. Hedge effectiveness: basis risk and minimum-variance hedging. Journal of Futures Markets 1992, 12(2):187-201.
7. Castelino M.G., Francis J.C., Wolf A. Cross-hedging: basis risk and choice of the optimal hedging vehicle. Financial Review 1991, 26(2):179-210.
8. Chicago Mercantile Exchange An Introduction to CME Weather Products 2005.
9. Chichilnisky G., Heal G. Managing unknown risks. The future of global reinsurance. Journal of Portfolio Management 1998, 24(4):85-91.
10. Chowdhry B., Howe J.T.B. Corporate risk management for multinational corporations: financial and operational hedging policies. Review of Finance 1999, 2(2):229-246.
11. Cogen, J., 1998. What is weather risk? Power Marketing Association Online Magazine. Retrieved from: http://www.retailenergy.com/articles/weather.htm.
12. Dawkins S.S., Stern H. Managing weather risk during major sporting events: the use of weather derivatives. Paper presented at the 2nd International Workshop on Climate, Tourism and Recreation 2004.
13. Ederington L.H. The hedging performance of the new futures markets. Journal of Finance 1979, 34(1):157-170.
14. Fairfield P.M., Whisenant J.S., Yohn T.L. Accrued earnings and growth: implications for future profitability and market mispricing. Accounting Review 2003, 78(1):353-371.
15. Figlewski S. Hedging performance and basis risk in stock index futures. The Journal of Finance 1984, 39(3):657-669.
16. Fukushima T., Kureha M., Ozaki N., Fujimori Y., Harasawa H. Influences of air temperature change on leisure industries-case study on ski activities. Mitigation and Adaptation Strategies for Global Change 2002, 7(2):173-189.
17. Golden L., Wang M., Yang C. Handling weather related risks through the financial markets: considerations of credit risk, basis risk, and hedging. Journal of Risk and Insurance 2007, 74(2):319-346.
18. Gomez Martin M.B Weather, climate and tourism. A geographical perspective. Annals of Tourism Research 2005, 32(3):571-591.
19. Graham J.R., Smith C.W. Tax incentives to hedge. The Journal of Finance 1999, 54(6):2241-2262.
20. Hamilton J.M., Maddison D.J., Tol R.S.J. Climate change and international tourism: a simulation study. Global Environmental Change Part A 2005, 15(3):253-266.
21. Hamilton L.C., Brown C., Keim B.D. Ski areas, weather and climate: time series models for New England case studies. International Journal of Climatology 2007, 27(15):2113-2124.
22. Intergovernmental Panel on Climate Change Climate Change 2007 Synthesis Report. IPCC Fourth Assessment Report 2007, Intergovernmental Panel on Climate Change, Valencia, Spain.
23. Jewson S., Brix A. Weather Derivative Valuation 2005, Cambridge University Press, Cambridge.
24. Kim Y.S., Mathur I., Nam J. Is operational hedging a substitute for or a complement to financial hedging?. Journal of Corporate Finance 2006, 12(4):834-853.
25. Leggio K.B. Using weather derivatives to hedge precipitation exposure. Managerial Finance 2007, 33(4):246-252.
26. Manfredo M.R., Richards T.J. Hedging with weather derivatives: a role for options in reducing basis risk. Applied Financial Economics 2009, 19(2):87-97.
27. Mossa I.A. Deterministic and stochastic seasonality in the oil imports of the Group of Seven countries. OPEC Review 1995, 19(3):181-201.
28. Netz J.S. An empirical test of the effect of basis risk on cash market positions. Journal of Futures Markets 1996, 16(3):289-311.
29. Pantzalis C., Simkins J.S., Laux P.A. Operational hedges and the foreign exchange exposure of U.S. multinational corporations. Journal of International Business Studies 2001, 32(4):793-812.
30. Petersen M.A., Thiagarajan S.R. Risk measurement and hedging: with and without derivatives. Financial Management 2000, 29(4):5-30.
31. PricewaterhouseCoopers Weather Risk Management Association 2006 Survey Results: Weather Risk Management Association 2006, (accessed February 5, 2010). http://www.wrma.org/members_survey.html.
32. Quinn L.R. Weather derivatives begins to attract the mother of all users: agriculture. Investment Dealers' Digest 1999, 65(48):13.
33. Richards T.J., Manfredo M.R., Sanders D.R. Pricing weather derivatives. American Journal of Agricultural Economics 2004, 86(4):1005-1017.
34. Scott D. Climate change and tourism in the mountain regions of North America. The 1st International Conference on Climate Change and Tourism 2003.
35. Scott D., McBoyle G. Climate change adaptation in the ski industry. Mitigation and Adaptation Strategies for Global Change 2007, 12(8):1411-1431.
36. Scott D., McBoyle G., Miller B. Climate change and the skiing industry in southern Ontario (Canada): exploring the importance of snowmaking as a technical adaptation. Climate Research 2003, 23:171-181.
37. Shih C., Nicholls S., Holecek D.F. Impact of weather on downhill ski lift ticket sales. Journal of Travel Research 2009, 47(3):359-372.
38. Smith C.W., Stulz R.M. The determinants of firms' hedging policies. Journal of Financial and Quantitative Analysis 1985, 20(4):391-405.