Hostname: page-component-76fb5796d-r6qrq Total loading time: 0 Render date: 2024-04-26T08:14:30.729Z Has data issue: false hasContentIssue false
  • English
  • Français

Weather Index Insurance and Common Property Resources

Published online by Cambridge University Press:  15 September 2016

Haimanti Bhattacharya  and
Daniel E. Osgood
Haimanti Bhattacharya*
Affiliation:
Department of Economics at University of Utah
Daniel E. Osgood
Affiliation:
International Research Institute for Climate and Society at Columbia University
*
Correspondence: Haimanti Bhattacharya ▪ Department of Economics ▪ University of Utah ▪ 260 South Central Campus Drive, OSH 343 ▪ Salt Lake City, UT 84112 ▪ Phone 801.587.8350 ▪ Emailhaimanti.bhattacharya@economics.utah.edu.
Get access

Abstract

With weather index insurance expanding and common property resources diminishing in low-income agricultural areas, it is essential to understand the potential effects of such insurance on resources that serve as vital input bases for low-income households. Using simple analytical constructs, we illustrate how index insurance may increase or decrease use of common property resources depending on common implementation characteristics such as binding constraints and multiple sources of income in a multi-temporal decision context. This analysis of how index insurance might assist low-income families without degrading the commons can be informative for insurance administrators and policymakers.

Keywords

agriculturecommon property resourceweather index insurance
Type
Research Article
Information
Agricultural and Resource Economics Review , Volume 43 , Issue 3 , December 2014 , pp. 438 - 450
Copyright
Copyright © 2014 Northeastern Agricultural and Resource Economics Association 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Banerjee, A.V., and Duflo, E. 2011. Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty. New York, NY: Public Affairs, Perseus Books Group.Google Scholar
Barnett, B.J., Barrett, C.B., and Skees, J.R. 2008. “Poverty Traps and Index-based Risk Transfer Products.” World Development 36(10): 1766–1785.Google Scholar
Barrett, C.B., Barnett, B., Carter, M., Chantarat, S., Hansen, J., Mude, A., Osgood, D., Skees, J., Turvey, C., and Ward, M. 2008a. “Poverty Traps and Climate and Weather Risk: Limitations and Opportunities of Index-based Risk Financing.” IRI Technical Report 07-02, International Research Institute for Climate and Society, Columbia University, New York, NY.Google Scholar
Barrett, C.B., Carter, M.R., Chantarat, S., McPeak, J., and Mude, A.G. 2008b. “Altering Poverty Dynamics with Index Insurance: Northern Kenya's HSNP+.” Basis Brief 8, Department of Agricultural and Applied Economics, University of Wisconsin, Madison.Google Scholar
Barrett, C.B., Marenya, P.P., McPeak, J., Minten, B., Murithi, F., Oluoch-Kosura, W., Place, F., Randrianarisoa, J.C., Rasambainarivo, J., and Wangila, J. 2006. “Welfare Dynamics in Rural Kenya and Madagascar.” Journal of Development Studies 42(2): 248–277.Google Scholar
Clarke, D., Mahul, O., Rao, K.N., and Verma, N. 2012. “Weather-based Crop Insurance in India.” World Bank Policy Research Working Paper 5985, The World Bank, Washington, DC.CrossRefGoogle Scholar
Cole, S., Giné, X., Tobacman, J., Townsend, R., Topalova, P., and Vickery, J. 2012. “Barriers to Household Risk Management: Evidence from India.” Finance Working Paper 09-116, Harvard Business School, Boston, MA.Google Scholar
Cole, S., Tobacman, J., and Topalova, P. 2007. “Weather Insurance: Managing Risk through an Innovative Retail Derivative.” Working Paper, Harvard Business School, Boston, MA.Google Scholar
Coyle, B.T. 1999. “Risk Aversion and Yield Uncertainty in Duality Models of Production: A Mean-Variance Approach.” American Journal of Agricultural Economics 81(3): 553–567.Google Scholar
Fratkin, E. 1997. “Pastoralism: Governance and Development Issues.” Annual Review of Anthropology 26: 235–261.Google Scholar
Giné, X., Townsend, R., and Vickery, J. 2007. “Statistical Analysis of Rainfall Insurance Payouts in Southern India.” World Bank Policy Research Working Paper 4426, The World Bank, Washington, DC.Google Scholar
Giné, X., Townsend, R., and Vickery, J. 2008. “Patterns of Rainfall Insurance Participation in Rural India.” The World Bank Economic Review 22(3): 539.Google Scholar
Giné, X., and Yang, D. 2009. “Insurance, Credit, and Technology Adoption: Field Experimental Evidence from Malawi.” Journal of Development Economics 89(1): 1–11.Google Scholar
Hazell, P., Anderson, J., Balzer, N., Clemmensen, A., Hess, U., and Rispoli, F. 2010. The Potential for Scale and Sustainability in Weather Index Insurance for Agriculture and Rural Livelihoods. Rome, Italy: International Fund for Agricultural Development.Google Scholar
Hellmuth, M.E., Osgood, D.E., Hess, U., Moorhead, A., and Bhojwani, H. (eds.). 2009. “Index Insurance and Climate Risk: Prospects for Development and Disaster Management.” Climate and Society Series 2, International Research Institute for Climate and Society, Columbia University, New York, NY.Google Scholar
Kalavakonda, V., and Mahul, O. 2005. “Crop Insurance in Karnataka.” World Bank Policy Research Working Paper 3654, The World Bank, Washington, DC.CrossRefGoogle Scholar
Libecap, G.D. 1989. “Distributional Issues in Contracting for Property Rights.” Journal of Institutional and Theoretical Economics 145(1): 6–24.Google Scholar
McAllister, R.R.J., Gordon, I.J., Janssen, M.A., Marco, A., and Abel, N. 2006. “Pastoralists’ Responses to Variation of Rangeland Resources in Time and Space.” Ecological Applications 16(2): 572–583.Google ScholarPubMed
McCarthy, N. 2000. “An Economic Analysis of the Effects of Production Risk on the Use and Management of Common-Pool Rangelands.” In McCarthy, N., Swallow, B., Kirk, M., and Hazell, P., eds., Property Rights, Risk, and Livestock Development in Africa. Washington, DC: International Food Policy Research Institute.Google Scholar
Miranda, M.J. 1991. “Area-Yield Crop Insurance Reconsidered.” American Journal of Agricultural Economics 73(2): 233–242.Google Scholar
Müller, B., Quaas, M.F., Frank, K., and Baumgärtner, S. 2011. “Pitfalls and Potential of Institutional Change: Rain-Weather Index Insurance and the Sustainability of Rangeland Management.” Ecological Economics 70(11): 2137–2144.Google Scholar
Ostrom, E. 1990. Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar
Oxfam. 2011. Horn of Africa Risk Transfer for Adaptation. Washington, DC: Oxfam America.Google Scholar
Quaas, M.F., and Baumgärtner, S. 2008. “Natural vs. Financial Insurance in the Management of Public-good Ecosystems.” Ecological Economics 65(2): 397–406.Google Scholar
Sandler, T., and Sterbenz, F.P. 1990. “Harvest Uncertainty and the Tragedy of the Commons.” Journal of Environmental Economics and Management 18(2): 155–167.Google Scholar
Swallow, B.M., and Bromley, D.W. 1995. “Institutions, Governance, and Incentives in Common Property Regimes for African Rangelands.” Environmental and Resource Economics 6(2): 99–118.Google Scholar
Syngenta Foundation for Sustainable Agriculture. 2011. “Agricultural Index Insurance Initiative.” Syngenta Foundation, Basel, Switzerland. Google Scholar
Turvey, C.G. 2001. “Weather Derivatives for Specific Event Risks in Agriculture.” Review of Agricultural Economics 23(2): 333–351.Google Scholar
Weitzman, M.L. 1974. “Prices vs. Quantities.” The Review of Economic Studies 41(4): 477–491.Google Scholar