Farmers demand for weather-based crop insurance contracts: The case of maize in south africa

Agrekon

Volumn 52, Issue 1, 2013, Pages 87-110

  Holly Wang, H ^a   Karuaihe, Raphael N ^b   Young, Douglas L ^b   Zhang, Yuehua ^c  

^a PURDUE UNIVERSITY   (United States)

^b WASHINGTON STATE UNIVERSITY   (United States)

^c ZHEJIANG UNIVERSITY   (China)

Author keywords

crop insurance; multiple weather indices; risk management; South Africa; weather derivatives

Indexed keywords

ZEA MAYS;

EID: 84876158427     PISSN: 03031853     EISSN: 20780400     Source Type: Journal    
DOI: 10.1080/03031853.2013.778468     Document Type: Article

References (46)

1. Barberis N. and Xiong, W. 2012. Realization utility. Journal of Financial Economics 104: 251-271.
2. Barnett, B. and Mahul, O. 2007. Weather index insurance for agriculture and rural areas in lower income countries. American Journal of Agricultural Economics 89: 1241-1247. (Pubitemid 350253264)
3. Barnett, B., Barrett, C. and Skees, J. 2008. Poverty traps and index-based risk transfer products. World Development 36: 1766-1785.
4. Brookshire, D. and Coursey, D. 1987. Measuring the value of a public good: An empirical comparison of elicitation procedures. American Economic Review 77(4): 554-566.
5. Bryan, G. 2010. Ambiguity and insurance. Mimeo. New Haven, CT.: Yale University.
6. Coble, K.H., Miller, J.C., Zuniga, M. and Heifner, R. 2004. The joint effect of government crop insurance and loan programmes on the demand for futures hedging. European Review of Agricultural Economics 31: 309-330. (Pubitemid 40144928)
7. Coble, K.H., Knight, T.O., Pope, R.D. and Black, J.R. 1997. An expected indemnity approach to the measurement of moral hazard in agricultural insurance markets. American Journal of Agricultural Economics 79: 216-226. (Pubitemid 127537397)
8. Cole, S.A., Giné, X., Tobacman, J., Topalova, P.B., Townsend, R.M. and Vickery, J.I. 2009. Barriers to household risk management: Evidence from India. Harvard Business School Finance Working Paper No. 09-116. Cambridge, MA: Harvard Business School.
9. Coursey, D., Hovis, J. and Schulze, W. 1987. The disparity between willingness to accept and willingness to pay measures of value. Quarterly Journal of Economics 102(3): 679-690.
10. Dischel, R.S. (ed.) 2002. Climate risk and the weather market. London: Risk Books.
11. Fuchs A. and Wolff, H. 2011. Concept and unintended consequences of weather index insurance: The case of Mexico. American Journal of Agricultural Economics 93(2): 505-511.
12. Giné, X. and Yang, D. 2009. Insurance, credit, and technology adoption: Field experimental evidence from Malawi. Journal of Development Economics 89: 1-11.
13. Glauber, J.W and Collins, K.J. 2002. Crop insurance, disaster assistance, and the role of the federal government in providing catastrophic risk protection. Agricultural Finance Review (Fall): 82-103.
14. Hess, U. and Hazell, P. 2009. Sustainability and scalability of index-based insurance for agriculture and rural livelihoods. IFPRI 2020 Focus 17, Brief 8. Washington, DC: International Food Policy Research Institute.
15. Hill, R.V., Hoddinott, J. and Kumar, N. 2011. Adoption of weather index insurance: Learning from willingness to pay among a panel of households in rural Ethiopia. IFPRI Discussion Paper 01088.
16. Hill, R.V. and Robles, M. 2011. Flexible insurance for heterogeneous farmers: Results from a small-scale pilot in Ethiopia. IFPRI Discussion Paper. Washington (DC): International Food Policy Research Institute.
17. Kahneman, D. and Tversky, A. 1979. Prospect theory: An analysis of decision under risk. Econometrica 47: 263-291.
18. Aquila Enters Marketing Deal with South African Bank http://www. bizjournals.com/kansascity/stories/2002/02/25/daily30.html
19. Knez, P., Smith, V.L. and Williams, A. 1985. Individual rationality, market rationality, and value estimation. American Economic Review 75(2): 397-402.
20. Lapan, H. and Moschini, G.M. 1994. Futures hedging under price, basis, and production risk. American Journal of Agricultural Economics 76: 465-477.
21. Leiva, A. and Shankar, B. 2001. Drought risk in Nicaragua: A crop, region, and technologyspecific empirical evaluation. Journal of Risk Research 4: 275-290.
22. List, J.A. (2004). Neoclassical theory versus prospect theory: Evidence from the market place. Econometrica 72(2): 615-625.
23. Loewenstein, G. and Kahneman, D. 1991. Explaining the endowment effect. Working paper, Carnegie Mellon.
24. Mahul, O. 2001. Optimal insurance against climatic experience. American Journal of Agricultural Economics 83: 593-604. (Pubitemid 32882318)
25. Mahul O. and Wright, B.D. 2003. Designing optimal crop revenue insurance. American Journal of Agricultural Economics 85(3): 580-589. (Pubitemid 36996995)
26. Martin, S.W., Barnett, B.J. and Coble, K.H. 2001. Developing and pricing precipitation insurance. Journal of Agricultural and Resource Economics 26: 261-274.
27. Meherette, E. 2009. Providing weather index and indemnity insurance in Ethiopia. IFPRI 2020 Focus 17, Brief 8. Washington (DC): International Food Policy Research Institute.
28. Miranda, M.J. 1991. Area-yield crop insurance reconsidered. American Journal of Agricultural Economics 73: 233-242.
29. Miranda, M.J. and Vedenov, D.V. 2001. Innovations in agricultural and natural disaster insurance. American Journal of Agricultural Economics 83: 650-655. (Pubitemid 32882323)
30. Rabin, M. 1998. Psychology and economics. Journal of Economic Literature 36(1): 11-46. (Pubitemid 128461584)
31. Roy, A.D. 1952. Safety first and the holding of assets. Econometrica 20(3): 431-449.
32. Sakurai, T. and Reardon, T. 1997. Potential demand for drought insurance in Burkina Faso and its determinants. American Journal of Agricultural Economics 79: 1193-1207.
33. Skees, J.R. and Ayurzana, E.A. 2002. Examining the feasibility of livestock insurance in Mongolia. Policy Research Working Paper 2886, The World Bank.
34. Skees, J.R., Black, J.R. and Barnett, B.J. 1997. Designing and rating an area yield crop insurance contract. American Journal of Agricultural Economics 79: 430-438.
35. Skees, J.R. and Reed, M.R. 1986. Rate-making and farm-level crop insurance: Implications for adverse selection. American Journal of Agricultural Economics 68: 653-659.
36. Skees, J.R., Hazell, P. and Miranda, M.J. 1999. New approaches to crop insurance in developing countries. International Food Policy Research Institute, EPTD Discussion Paper No. 55.
37. Skees, J., Gober, S. Varangis, P, Lester, R and Kalavakonda, V. 2001. Developing rainfall-based index insurance in Morocco. World Bank Policy Research Working Paper 2577.
38. Telser, L.G. 1955. Safety first and hedging. The Review of Economic Studies 23(1): 1-16.
39. Turvey, C.G. 2001. Weather derivatives for specific event risks in agriculture. Review of Agricultural Economics 23: 333-351.
40. Turvey, C.G. 2005. The pricing of degree-day weather options. Agricultural Finance Review (Spring): 59-85.
41. Turvey, C.G. and Kong, R. 2010. Weather risk and the viability of weather insurance in China's Gansu, Shaanxi and Henan provinces, China Agricultural Economic Review 2: 5-24.
42. Vedenov, D.V. and Barnett, B.J. 2004. Efficiency of weather derivatives as primary crop insurance instruments. Journal of Agricultural and Resource Economics 29: 387-403. (Pubitemid 40191445)
43. Vukina, T., Li, D-F. and Holthausen, D.M. 1996. Hedging with crop yield futures: A meanvariance analysis. American Journal of Agricultural Economics 78: 1015-1025.
44. Wang, H.H., Makus, L.D. and Chen, X. 2004. the impact of us commodity programmes on hedging in the presence of crop insurance. European Review of Agricultural Economics 31: 331-352. (Pubitemid 40144929)
45. Wang, H.H., Hanson, S.D. Myers, R.J. and Black, J.R. 1998. The effects of crop yield insurance designs on farmer participation and welfare. American Journal of Agricultural Economics 80: 806-820. (Pubitemid 29386423)
46. Yamauchi, T. 1986. Evolution of the crop insurance program in Japan. In P. Hazell, C. Pomareda and A. Valdes, (eds.) Crop insurance for agricultural development: Issues and experience. Baltimore: Johns Hopkins University Press: 223-239.