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Maize Index Insurance And Management Of Climate Change In A Developing Economy

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  • B. W. Mazviona

Abstract

This study provides an evaluation of the effectiveness of the maize index insurance in reducing the risk exposure of small-scale farmers in Zimbabwe. Maize yields and rainfall data for the period 2010–2019 farming season were obtained from AGRITEXT and the NASA website. The Black-Scholes optional pricing framework was applied to estimate the prices of the maize index insurance. The mean root square loss (MRSL) was evaluated for the case where there is no insurance and where there is insurance. MRSL was compared for the two scenarios. The index insurance was found to be efficient in risk reduction as positive changes in MRSL were observed.

Suggested Citation

  • B. W. Mazviona, 2022. "Maize Index Insurance And Management Of Climate Change In A Developing Economy," Strategic decisions and risk management, Real Economy Publishing House, vol. 12(4).
    • Handle: RePEc:abw:journl:y:2022:id:979
    DOI: 10.17747/2618-947X-2021-4-299-305
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    References listed on IDEAS

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    3. Mario J. Miranda & Katie Farrin, 2012. "Index Insurance for Developing Countries," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 34(3), pages 391-427.
    4. Martin Odening & Zhiwei Shen, 2014. "Challenges of insuring weather risk in agriculture," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 74(2), pages 188-199, July.
    5. Adhikari, Shyam & Knight, Thomas O. & Belasco, Eric J., 2012. "Evaluation of Crop Insurance Yield Guarantees and Producer Welfare with Upward-Trending Yields," Agricultural and Resource Economics Review, Cambridge University Press, vol. 41(3), pages 367-376, December.
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