Hedging price risk in the presence of crop yield and revenue insurance
The demand for hedging against price uncertainty in the presence of crop yield and revenue insurance contracts is examined for French wheat farms. The rationale for the use of options in addition to futures is first highlighted through the characterisation of the first-best hedging strategy in the expected utility framework. It is then illustrated using numerical simulations. Futures and crop yield insurance are shown to be complements, whereas futures and crop revenue insurance are substitutes. The presence of options induces the insured producer to adopt a more speculative position on the futures market. Futures and options would improve the producer's welfare, in terms of willingness to receive. Copyright 2003, Oxford University Press.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 30 (2003)
Issue (Month): 2 (June)
|Contact details of provider:|| Postal: |
Fax: 01865 267 985
Web page: http://www.erae.oupjournals.org/
More information through EDIRC
|Order Information:||Web: http://www.oup.co.uk/journals|
When requesting a correction, please mention this item's handle: RePEc:oup:erevae:v:30:y:2003:i:2:p:217-239. 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: (Oxford University Press)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.