TY  - JOUR
AB  - The effectiveness of hedging drought risks with weather derivatives was investigated for rain‐fed grain maize production in Switzerland under current (1981‐2003) and projected future (2070‐2100) climatic conditions. Depending on location, hedging reduced the value‐at‐ (VaR) measure to a variable degree, although with a considerable basis risk, but hedging may provide a valid risk transfer since loading of 90 per cent to 240 per cent of the fair premium can be paid to obtain a hedged situation with improved outcomes relative to the reference. However, the fair premium of a specific contract may vary by a factor of two to four over the 70‐year period considered, which represents a substantial uncertainty for both the farmer and the institution writing the contract.
VL  - 68
IS  - 1
SN  - 0002-1466
DO  - 10.1108/00214660880001219
UR  - https://doi.org/10.1108/00214660880001219
AU  - Simone Torriani Daniele
AU  - Calanca Pierluigi
AU  - Beniston Martin
AU  - Fuhrer Jürg
PY  - 2008
Y1  - 2008/01/01
TI  - Hedging with weather derivatives to cope with climate variability and change in grain maize production
T2  - Agricultural Finance Review
PB  - Emerald Group Publishing Limited
SP  - 67
EP  - 81
Y2  - 2024/04/25
ER  -