Effectiveness of weather derivatives as a hedge against the weather risk in agriculture
Ivana Stulec, Kristina Petljak, Tomislav Bakovichttps://doi.org/10.17221/188/2015-AGRICECONCitation:Stulec I., Petljak K., Bakovic T. (2016): Effectiveness of weather derivatives as a hedge against the weather risk in agriculture. Agric. Econ. – Czech, 62: 356-362.
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 agricultureKeywords:
agriculture, hedging effectiveness, non-catastrophic weather risk, weather derivativesReferences:
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