|
|||||
|
|
Hedging dairy production losses using weather-based index insurance |
|
| Authors: | Xiaohui Deng Barry J. Barnett Dmitry V. Vedenov Joe W. West |
| Affiliation: | Department of Agricultural Economics, California State University Fresno, 5245 N Backer Avenue, M/S PB101, Fresno, CA 93740, USA;Department of Agricultural and Applied Economics, University of Georgia, Conner Hall, Athens, GA 30602, USA;Department of Animal and Dairy Science, University of Georgia, P.O. Box 748, Coastal Plain Experiment Station, Tifton, GA 31793, USA |
| Abstract: | This article proposes a temperature–humidity index insurance product and examines whether this product can effectively protect against the risk of reduced milk production caused by heat stress. Results suggest that even when premiums are at higher than actuarially fair levels and the insurance purchaser is faced with both spatial and temporal basis risks, a temperature–humidity index insurance product would provide risk management benefits to a representative south‐central Georgia dairy producer. |
| Keywords: | G13 G22 Q12 |