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Weather Insurance of Wine - How Quantity and Quality Regulations Affect Risks

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  • Phelippe-Guinvarc'h, Martial

Abstract

To develop weather insurance, GROUPAMA builds a general model of agronomic crop yield density function. This approach is applied for cereal, industrial products, wine and fruits. From the density function, weather risk premium is computed. The wine-producing practices disturb our approach of risks. First, wine yields are limited by public regulations. Second, some cooperatives applied quality regulations. Then, observed crop yields are not agronomic crop yields needed by the model. The paper proposes a simulation process to estimate the agronomic parameters of areas crop yields from observed crop yields data. This process is tested on Champagne wine historical data. We measure too the impact of the quantity rules on our estimation of premium. Next, the paper analyses impact on quality on the idiosyncratic risk and on the premium. It results that agronomic parameters give cheaper premium estimation. Because rigorous growing process is implemented, include quality risk is not systemically more expensive but need to compute an individual analyse.

Suggested Citation

  • Phelippe-Guinvarc'h, Martial, 2007. "Weather Insurance of Wine - How Quantity and Quality Regulations Affect Risks," 101st Seminar, July 5-6, 2007, Berlin Germany 9258, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa101:9258
    DOI: 10.22004/ag.econ.9258
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    References listed on IDEAS

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    1. Olivier Mahul & Brian D. Wright, 2003. "Designing Optimal Crop Revenue Insurance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 580-589.
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