Weather index-based insurance as a meteorological risk management alternative in viticulture
Martínez-Salgueiro, Andrea (Universitat Autònoma de Barcelona)

Data:	2019
Resum:	This article explores the hedging potential of two weather index-based insurance programmes designed for the Rias Baixas Protected Designation of Origin (Spain). The first alternative insures both extreme and non-extreme weather events, while the second instrument covers exclusively extreme meteorological states. Two bioclimatic indicators computed for the period most correlated to grape yields are proposed as underlyings: the Branas, Bernon and Levadoux (BBL) and the Ribéreau-Gayon and Peynaud hydrothermal scale (RGP). Yield-weather dependence is then modelled with two different methodological approaches: copulas and linear regression. To asses the risk reducing potential, a hedging effectiveness analysis based on real and simulated data is carried out. The model uses variance and expected shortfall as risk measures. The results attained point out the high hedging ability of both insurance programmes, especially of the first of them based on RGP. This appraisal also reveals that the copula technique outperforms linear regression. Overall, the study results suggest that the implementation of policies geared to bioclimatic indices able to signal adverse weather events can significantly mitigate weather-related yield variations in viticulture.
Nota:	This research is funded by a grant awarded to Andrea Martínez Salgueiro by " la Caixa " Foundation in its "Doctoral Scholarship Programme 2016". This institution, which encourages the publication of research results, had no other involvement in the development of this study. The project that gave rise to these results received the support of a grant from "la Caixa" Foundation (ID 100010434). The grant code is LCF/BQ/DE16/11570002. The author is thankful to Maria-Antonia Tarrazon-Rodon (UAB) and Juan Carlos Reboredo (USC) for interesting insights on previous stages of this research. She also thanks the two anonymous reviewers whose comments helped improve and clarify the manuscript.
Nota:	Altres ajuts: LCF/BQ/DE16/11570002
Drets:	Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, i la comunicació pública de l'obra, sempre que no sigui amb finalitats comercials, i sempre que es reconegui l'autoria de l'obra original. No es permet la creació d'obres derivades.
Llengua:	Anglès
Document:	Article ; recerca ; Versió publicada
Matèria:	Weather index-based Insurance ; Viticulture ; Meteorological risk ; Hedging effectiveness ; Copula approach
Publicat a:	Wine Economics and Policy, Vol. 8 Núm. 2 (december 2019) , p. 114-126, ISSN 2212-9774

DOI: 10.1016/j.wep.2019.07.002

13 p, 1.7 MB

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