Heat can cause substantial yield losses in crop production and climate change is increasing the risk of this kind damage. Weather index insurance help to reduce financial resulting from heat exposure. This paper introduces crop-specific payout functions based on restricted cubic splines insurance. The use a cutting-edge method reflect empirically estimated temperature effects yields estimate te...

Most households in low-income countries deal with economic hardships through informal insurance arrangements between individuals and communities rather than through publicly managed programs or market-provided insurance schemes. Households may, for example, draw on savings, sell physical assets, rely on reciprocal gift exchanges, or diversify into alternative income-generating activities. These...

Systemic weather risk is a major obstacle for the formation of private (nonsubsidized) crop insurance. This paper explores the possibility of spatial diversification of insurance by estimating the joint occurrence of unfavorable weather conditions in different locations. For that purpose copula methods are employed that allow an adequate description of stochastic dependencies between multivaria...

Congress extended the crop insurance program to livestock with the Agricultural Risk Protection Act (ARPA) of 2000. Two livestock insurance products, Livestock Risk Protection (LRP) and Livestock Gross Margin (LGM), were subsequently approved by FCIC for sale beginning in the summer of 2002. Originally, LRP offered insurance against unexpected declines in the market price of hogs in Iowa. In 20...