Improving humanitarian response to slow-onset disasters using famine-indexed weather derivatives
Abstract
This paper illustrates how weather derivatives indexed to forecasts of famine can be designed and used by operational agencies and donors to facilitate timely and reliable financing, for effective emergency response to climate-based, slow-onset disasters such as drought. We provide a general framework for derivative contracts, especially in the context of index insurance and famine catastrophe bond, and show how they can be used to complement existing tools and facilities in drought risk financing through a risk-layering strategy. We use the case of arid lands of northern Kenya, where rainfall proves a strong predictor of widespread and severe child wasting, to provide a simple empirical illustration of the potential contract designs.Download Info
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Bibliographic Info
Article provided by Emerald Group Publishing in its journal Agricultural Finance Review.
Volume (Year): 68 (2008)
Issue (Month): 1 (September)
Pages: 169-195
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Web page: http://www.emeraldinsight.com
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Related research
Keywords: Catastrophe bond; Covariate risk; Famine relief; Food aid; Food insecurity; Kenya; Pastoralists; Weather derivatives;References
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Rong Kong & Calum G. Turvey & Guangwen He & Jiujie Ma & Patrick Meagher, 2011. "Factors influencing Shaanxi and Gansu farmers' willingness to purchase weather insurance," China Agricultural Economic Review, Emerald Group Publishing, vol. 3(4), pages 423-440, November.
- Leblois, Antoine & Quirion, Philippe & Alhassane, Agali & Traore, Seydou, 2011. "Weather index drought insurance: an ex ante evaluation for millet growers in Niger," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 120378, European Association of Agricultural Economists.
- Muamba, Francis M. & Ulimwengu, John M., 2010. "Optimal rainfall insurance contracts for maize producers in Ghana’s Northern Region," IFPRI discussion papers 1016, International Food Policy Research Institute (IFPRI).
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