Agric. Econ. - Czech, 2016, 62(8):356-362 | DOI: 10.17221/188/2015-AGRICECON

Effectiveness of weather derivatives as a hedge against the weather risk in agricultureOriginal Paper

Ivana STULEC, Kristina PETLJAK, Tomislav BAKOVIC
Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia

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 agriculture

Keywords: agriculture, hedging effectiveness, non-catastrophic weather risk, weather derivatives

Published: August 31, 2016  Show citation

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STULEC I, PETLJAK K, BAKOVIC T. Effectiveness of weather derivatives as a hedge against the weather risk in agriculture. Agric. Econ. - Czech. 2016;62(8):356-362. doi: 10.17221/188/2015-AGRICECON.
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