REDUCTION IN REVENUE VOLATILITY IN MAIZE PRODUCTION APPLYING THE INDIRECT-INDEX INSURANCE

Todor Markovic, Sanjin Ivanović and Saša Todorović

Economics of Agriculture, 2013, vol. 60, issue 3, 10

Abstract: This paper is aimed at providing the basic theoretical postulates of indirect-index insurance and by its application at quantifying the effect of the reduction in risk using a stochastic simulation. The paper uses data on maize yield gathered from family farm in the central part of Srem, and weather data were acquired from the nearest referential meteorological station. For the purpose of achieving a stated aim, two situations were analysed: maize production value by using the indirect-index insurance and by using no indirect-index insurance. In the case of applying this type of insurance, a farmer can decrease the risk by 8,816 RSD/ha (r=1.0), 4,116 RSD/ha if the correlation coefficient is 0.8, that is 2,598 RSD/ha (r=0.6). Therefore, it is possible to conclude that there is a significant effect of the reduction in risk by applying indirect-index insurance.

Keywords: Agribusiness; Financial Economics; Risk and Uncertainty (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/158247/files/1 ... vic_%20Todorovic.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:iepeoa:158247

DOI: 10.22004/ag.econ.158247

Access Statistics for this article

More articles in Economics of Agriculture from Institute of Agricultural Economics Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().