Probabilistic Modeling of Catastrophic Weather Risks: Implications for Indemnification Plans for Animal Waste Spills

Barry Goodwin () and Ligia Vado

No 9710, 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This paper presents probabilistic and economic models of two dimensions of catastrophic weather risks that are important factors underlying lagoon failures and waste spills in North Carolina-hurricane risks and the risks associated with significant cumulative rainfall. Hurricane strike and excessive cumulative rainfall probabilities are estimated for the entire state. Expected losses, which represent actuarially-fair insurance premium rates for a plan that would indemnify producers against damages from lagoon failures, are evaluated. Results imply annual premiums ranging from under $100 per year to over $2,062 per year. An interesting result is that those areas with the highest levels of expected loss are also those areas with the greatest concentration of waste lagoons.

Keywords: Livestock Production/Industries; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 32
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea07:9710

DOI: 10.22004/ag.econ.9710

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