Pitfalls and potential of institutional change: Rain-index insurance and the sustainability of rangeland management

Birgit Müller, Martin Quaas, Karin Frank and Stefan Baumgärtner

Ecological Economics, 2011, vol. 70, issue 11, 2137-2144

Abstract: Rain-index insurance is strongly advocated in many parts of the developing world to help farmers to cope with climatic risk that prevails in (semi-)arid rangelands due to low and highly uncertain rainfall. We present a modeling analysis of how the availability of rain-index insurance affects the sustainability of rangeland management. We show that a rain-index insurance with frequent payoffs, i.e. a high strike level, leads to the choice of less sustainable grazing management than without insurance available. However, rain-index insurance with a low to medium strike level enhances the farmer's well-being while not impairing the sustainability of rangeland management.

Keywords: Ecological-economic; modeling; Weather-index; insurance; Namibia; Risk; Grazing; management; Africa (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (13)

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Working Paper: Pitfalls and potential of institutional change: Rain-index insurance and the sustainability of rangeland management (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:70:y:2011:i:11:p:2137-2144

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