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The weather largely affects economic activity, and thus, companies vulnerable to weather risk need to plan ahead to cope with unexpected weather changes, just as they do for changes in interest rates, oil prices, or foreign exchange rates to stabilize their earning stream. Weather derivatives can be a useful tool for weather risk management.

This paper focuses on pricing one of the most popular weather derivatives -HDD/CDD options- and estimating the market price of weather risk (MPR). Historical data are used to construct the stochastic process of temperature, while the current market prices of Chicago and New York HDD futures options are used to extract the implied MPR. The Monte-Carlo Simulation Method is proposed to estimate the price of weather derivatives numerically. In addition, the approximate closed form formula for the options is provided modifying the Alaton, Djehiche, and Stillberg (2002) model. Finally, option price sensitivity to changes in MPR is analyzed to show the important role of the MPR in the weather option pricing model.

The main objectives of this paper are to measure weather-risks in Korean city-gas industry, whose revenue is strongly correlated with temperature changes, and show how managing weather-related risks using weather derivatives (priced using a utility indifference pricing technique) affects Korean city-gas industry's volatility of cash-flow through computational tests.

Since the fluctuation in temperature is the major risk factor for Korean city-gas providers (who are mostly nongovernmental companies), they can considered as strong potential participants in weather-derivatives' market. Therefore, it is worthwhile to investigate the impact of temperature changes on city-gas demands and the effectiveness of the application of weather-derivatives to city-gas providers' revenue. Our tests indicate that hedging weather-risks using weather derivatives can not only reduce the volatility of cash-flow but also increase cash income for Korean city-gas providers.

This paper aims to investigate aspects of flood experience, attitudes and responses of micro-, small- and medium-sized enterprises (MSMEs) in Greece and to indicate a typology of strategies associated with their relative effort to build flood resilience capacity.

A qualitative study protocol was used, based on pertinent literature that considers how business entities withstand, adapt and/or recover from non-linear climate change impacts, natural hazards and extreme weather. Data was obtained by conducting semi-structured interviews with 82 MSMEs’ owners-managers who had recently experienced flooding.

The study reports limited activities of MSMEs towards flood resilience capacity despite the threat of relevant disasters. Findings suggest that most owners-managers of these enterprises are not adequately preparing their businesses for the impacts of flooding.

The findings call for multi-level and dynamic perspectives to be examined in assessing MSME resilience capacity to floods. It is attitudinal, managerial, organisational, behavioural and regulatory (as well as other institutional) factors that merit further investigation. Such an investigation would allow a better understanding as to whether these factors hinder or enable conditions for microeconomic flood preparedness and resilience as well as how they may interact with each other or create feedback loops.

The study carries managerial implications and policy recommendations in terms of nurturing opportunities towards awareness-raising campaigns for reducing deficits in managerial knowledge and competencies. It also encapsulates practical implications in terms of emphasising supporting mechanisms from key institutional stakeholders to allow MSMEs scan available options they have in effectively reinforcing the business premises from the forces of rising waters.

Most of the related studies have examined flood impacts, responses and/or resilience capacity at the household- or community-level. Empirical work that is conducted to ascertain how MSMEs cope with flooding remains thin on the ground. In response to this, the current study and the typology of MSMEs’ strategic postures that are suggested seek to contribute to this under-researched topic.

The purpose of this study is to investigate the determinants of agricultural insurance adoption by farmers of the state of São Paulo, Brazil.

Primary data from the 2015/2016 crop season was collected from a sample of 175 farmers. Logit econometric models were applied to identify the variables that affect the probability of agricultural insurance adoption.

The empirical results show that the education level, access to technical assistance, use of management tools and farm size positively affect the probability of adopting agricultural insurance. In addition, farmers who produce soybean and/or corn are more likely to use insurance. On the other hand, the higher the farmers’ propensity to take risk the lower the likelihood of using insurance.

The empirical analysis is based on cross-sectional data of a sample of 175 farmers of the state of São Paulo. The use of panel data with a larger sample of farmers, considering a period of years, could provide additional information.

To the best of the knowledge, this is the first empirical analysis about determinants of agricultural insurance adoption by Brazilian farmers, considering behavioral factors. The findings provide useful insights for policymakers in formulating risk management programs in the Brazilian agricultural markets. A better understanding about the determinants of insurance adoption is also relevant for private companies that sell insurance to farmers. Therefore, the paper may contribute with the diffusion of rural insurance as risk management tool in Brazilian agriculture.