Effectiveness of weather derivatives as a hedge against the weather risk in agriculture

Ivana Stulec, Kristina Petljak and Tomislav Bakovic
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Ivana Stulec: Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia
Kristina Petljak: Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia
Tomislav Bakovic: Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia

Agricultural Economics, 2016, vol. 62, issue 8, 356-362

Abstract: Weather affects the economies worldwide and all economic sectors are to some extent weather sensitive. Agriculture is traditionally highly weather sensitive. While the catastrophic impact of weather has been long recognized, studied and managed the non-catastrophic weather risk gains in importance as the climate change becomes more pronounced. Weather derivatives provide a flexible management solution for the non-catastrophic weather risk. The paper presents weather derivatives as a new weather risk management tool and reviews and discusses the effectiveness of their application in agriculture

Keywords: agriculture; hedging effectiveness; non-catastrophic weather risk; weather derivatives (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:62:y:2016:i:8:id:188-2015-agricecon

DOI: 10.17221/188/2015-AGRICECON

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