Pitfalls and potential of institutional change: Rain-index insurance and the sustainability of rangeland management
Rain-index insurance is strongly advocated in many parts of the developing world to help farmers to cope with climatic risk that prevails in (semi-)arid rangelands due to low and highly uncertain rainfall. We present a modeling analysis of how the availability of rain-index insurance affects the sustainability of rangeland management. We show that a rain-index insurance with frequent payoffs, i.e. a high strike level, leads to the choice of less sustainable grazing management than without insurance available. However, rain-index insurance with a low to medium strike level enhances the farmer's well-being while not impairing the sustainability of rangeland management.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sommarat Chantarat & Christopher B. Barrett & Andrew G. Mude & Calum G. Turvey, 2007. "Using Weather Index Insurance to Improve Drought Response for Famine Prevention," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(5), pages 1262-1268.
- Martin F. Quaas & Stefan Baumgärtner, 2011. "Optimal grazing management rules in semi-arid rangelands with uncertain rainfall," Working Paper Series in Economics 193, University of Lüneburg, Institute of Economics.
- Olivier Mahul, 2001. "Optimal Insurance Against Climatic Experience," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 593-604.
- Barry J. Barnett & Olivier Mahul, 2007. "Weather Index Insurance for Agriculture and Rural Areas in Lower-Income Countries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(5), pages 1241-1247.
- Stefan Baumgärtner & Martin F. Quaas, 2007. "Agro-biodiversity as natural insurance and the development of financial insurance markets," Working Paper Series in Economics 61, University of Lüneburg, Institute of Economics.
- Muller, Birgit & Frank, Karin & Wissel, Christian, 2007. "Relevance of rest periods in non-equilibrium rangeland systems - A modelling analysis," Agricultural Systems, Elsevier, vol. 92(1-3), pages 295-317, January.
- Hein, Lars & Weikard, Hans-Peter, 2008. "Optimal long-term stocking rates for livestock grazing in a Sahelian rangeland," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 2(2), September.
- Ehrlich, Isaac & Becker, Gary S, 1972. "Market Insurance, Self-Insurance, and Self-Protection," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 623-48, July-Aug..
- Stefan Hochrainer & Reinhard Mechler & Georg Pflug, 2009. "Climate change and financial adaptation in Africa. Investigating the impact of climate change on the robustness of index-based microinsurance in Malawi," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 14(3), pages 231-250, March.
- Skees, Jerry & Varangis, Panos & Larson, Donald & Siegel, Paul, 2002.
"Can Financial Markets be Tapped to Help Poor People Cope with Weather Risks?,"
Working Paper Series
UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Skees, Jerry & Varangis, Panos & Larson, Donald & Siegel, Paul, 2002. "Can financial markets be tapped to help poor people cope with weather risks ?," Policy Research Working Paper Series 2812, The World Bank.
- Mario Miranda & Dmitry V. Vedenov, 2001. "Innovations in Agricultural and Natural Disaster Insurance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 650-655.
- JunJie Wu, 1999. "Crop Insurance, Acreage Decisions, and Nonpoint-Source Pollution," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(2), pages 305-320.
- Salvatore Di Falco & Jean-Paul Chavas & Melinda Smale, 2007. "Farmer management of production risk on degraded lands: the role of wheat variety diversity in the Tigray region, Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 36(2), pages 147-156, 03.
- Jerry R. Skees, 2008. "Challenges for use of index-based weather insurance in lower income countries," Agricultural Finance Review, Emerald Group Publishing, vol. 68(1), pages 197-217, September.
- Di Falco, Salvatore & Perrings, Charles, 2005.
"Crop biodiversity, risk management and the implications of agricultural assistance,"
Elsevier, vol. 55(4), pages 459-466, December.
- Salvatore Di Falco & Charles Perrings, 2004. "Crop Biodiversity, Risk Management and the Implications of Agricultural Assistance," Working Papers 0084, National University of Ireland Galway, Department of Economics, revised 2004.
- Haimanti Bhattacharya & Dan Osgood, 2008. "Index Insurance and Common Property Pastures," Working Paper Series, Department of Economics, University of Utah 2008_21, University of Utah, Department of Economics.
- Di Falco, Salvatore & Chavas, Jean-Paul & Smale, Melinda, 2006. "Farmer management of production risk on degraded lands: the role of wheat genetic diversity in Tigray Region, Ethiopia," EPTD discussion papers 153, International Food Policy Research Institute (IFPRI).
- Nieuwoudt, W. Lieb, 2000. "An economic evaluation of a crop insurance programme for small-scale commercial farmers in South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 39(3), September.
- World Bank, 2005. "Managing Agricultural Production Risk : Innovations in Developing Countries," World Bank Other Operational Studies 14434, The World Bank.
- Baumgärtner, Stefan & Quaas, Martin F., 2009.
"Ecological-economic viability as a criterion of strong sustainability under uncertainty,"
Elsevier, vol. 68(7), pages 2008-2020, May.
- Stefan Baumgärtner & Martin F. Quaas, 2007. "Ecological-economic viability as a criterion of strong sustainability under uncertainty," Working Paper Series in Economics 67, University of Lüneburg, Institute of Economics.
- Quaas, Martin F. & Baumgärtner, Stefan, 2008.
"Natural vs. financial insurance in the management of public-good ecosystems,"
Elsevier, vol. 65(2), pages 397-406, April.
- Martin F. Quaas & Stefan Baumgärtner, 2006. "Natural vs. financial insurance in the management of public-good ecosystems," Working Paper Series in Economics 34, University of Lüneburg, Institute of Economics.
- Hans‐Peter Weikard & Lars Hein, 2011. "Efficient versus Sustainable Livestock Grazing in the Sahel," Journal of Agricultural Economics, Wiley Blackwell, vol. 62(1), pages 153-171, 02.
- Salvatore Di Falco & Charles Perrings, 2003. "Crop Genetic Diversity, Productivity and Stability of Agroecosystems. A Theoretical and Empirical Investigation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(2), pages 207-216, 05.
- Quaas, Martin F. & Baumgartner, Stefan & Becker, Christian & Frank, Karin & Muller, Birgit, 2007. "Uncertainty and sustainability in the management of rangelands," Ecological Economics, Elsevier, vol. 62(2), pages 251-266, April.
- Barnett, Barry J. & Barrett, Christopher B. & Skees, Jerry R., 2008. "Poverty Traps and Index-Based Risk Transfer Products," World Development, Elsevier, vol. 36(10), pages 1766-1785, October.
- Roland Olbrich & Martin F. Quaas & Stefan Baumgärtner, 2009. "Sustainable use of ecosystem services under multiple risks – a survey of commercial cattle farmers in semi-arid rangelands in Namibia," Working Paper Series in Economics 137, University of Lüneburg, Institute of Economics.
When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:70:y:2011:i:11:p:2137-2144. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.