TY  - JOUR
AB  - Recent and presumable future developments tend to increase the risks associated with farming activities. These include climate risks, which have always played an important role in farming. Weather‐based instruments can be valuable tools to reduce the risk associated with unfavourable climate events. However, a number of factors could limit the hedging effectiveness of these tools. These factors include basis risk, the impacts of remaining price uncertainty, and diversification effects. This paper addresses the influence of each of these factors. In the final section, an integrated approach for a comprehensive assessment of weather derivatives and other hedging instruments is proposed that is based on the concept of portfolio optimization.
VL  - 68
IS  - 1
SN  - 0002-1466
DO  - 10.1108/00214660880001222
UR  - https://doi.org/10.1108/00214660880001222
AU  - Berg Ernst
AU  - Schmitz Bernhard
PY  - 2008
Y1  - 2008/01/01
TI  - Weather‐based instruments in the context of whole‐farm risk management
T2  - Agricultural Finance Review
PB  - Emerald Group Publishing Limited
SP  - 119
EP  - 133
Y2  - 2024/09/21
ER  -