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| Berg, Ernst; Schmitz, Bernhard; Starp, Michael; Trenkel, Hermann. |
| The risks associated with farming activities are likely to increase in the future. It, therefore, appears worthwhile to analyse new risk management instruments. This paper investigates weather derivatives for which a market has already emerged in the USA. Contrary to traditional financial derivatives, their payoff is determined by future weather events, such as temperature or precipitation. Thus, they hedge risks which result from climate. Since they address production risks they are complementary to instruments that hedge price risks, such as future markets. The objective of the paper is to evaluate the economic impacts of weather derivatives and to assess their potential as farm level instruments of risk management. After outlining the main... |
| Tipo: Journal Article |
Palavras-chave: Weather derivatives; Weather risk; Risk management; Stochastic simulation; Financial Economics; Risk and Uncertainty. |
| Ano: 2005 |
URL: http://purl.umn.edu/97213 |
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