Demand for weather hedges in India: An empirical exploration of theoretical predictions
This paper analyzes the demand for rainfall-based weather hedges among farmers in rural India. We explore the predictions of a standard expected utility theory framework on the nature of demand for such products, in particular testing whether demand behaves as predicted with respect to price, the ba...
| Autores principales: | , , |
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| Formato: | Artículo preliminar |
| Lenguaje: | Inglés |
| Publicado: |
International Food Policy Research Institute
2013
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| Materias: | |
| Acceso en línea: | https://hdl.handle.net/10568/153559 |
| _version_ | 1855541341718577152 |
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| author | Hill, Ruth Vargas Robles, Miguel Ceballos, Francisco |
| author_browse | Ceballos, Francisco Hill, Ruth Vargas Robles, Miguel |
| author_facet | Hill, Ruth Vargas Robles, Miguel Ceballos, Francisco |
| author_sort | Hill, Ruth Vargas |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | This paper analyzes the demand for rainfall-based weather hedges among farmers in rural India. We explore the predictions of a standard expected utility theory framework on the nature of demand for such products, in particular testing whether demand behaves as predicted with respect to price, the basis of the hedge, and risk aversion using data from a randomized control trial in which price and basis risk was varied for a series of hedging products offered to farmers. We find that demand behaves as predicted, with demand falling with price and basis risk, and appearing hump-shaped in risk aversion. Second, we analyze understanding of and demand for hedging products over time, examining the impact of increased investments in training on hedging products as well as evidence for learning by doing among farmers. We find evidence that suggests that learning by doing is more effective at increasing both understanding and demand. |
| format | Artículo preliminar |
| id | CGSpace153559 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2013 |
| publishDateRange | 2013 |
| publishDateSort | 2013 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1535592025-11-06T07:24:08Z Demand for weather hedges in India: An empirical exploration of theoretical predictions Hill, Ruth Vargas Robles, Miguel Ceballos, Francisco insurance economic analysis weather index insurance risk experimental design This paper analyzes the demand for rainfall-based weather hedges among farmers in rural India. We explore the predictions of a standard expected utility theory framework on the nature of demand for such products, in particular testing whether demand behaves as predicted with respect to price, the basis of the hedge, and risk aversion using data from a randomized control trial in which price and basis risk was varied for a series of hedging products offered to farmers. We find that demand behaves as predicted, with demand falling with price and basis risk, and appearing hump-shaped in risk aversion. Second, we analyze understanding of and demand for hedging products over time, examining the impact of increased investments in training on hedging products as well as evidence for learning by doing among farmers. We find evidence that suggests that learning by doing is more effective at increasing both understanding and demand. 2013 2024-10-01T13:56:39Z 2024-10-01T13:56:39Z Working Paper https://hdl.handle.net/10568/153559 en Open Access application/pdf International Food Policy Research Institute Hill, Ruth Vargas; Robles, Miguel and Ceballos, Francisco. 2013. Demand for weather hedges in India: An empirical exploration of theoretical predictions. IFPRI Discussion Paper 1279. Washington, DC: International Food Policy Research Institute (IFPRI). https://hdl.handle.net/10568/153559 |
| spellingShingle | insurance economic analysis weather index insurance risk experimental design Hill, Ruth Vargas Robles, Miguel Ceballos, Francisco Demand for weather hedges in India: An empirical exploration of theoretical predictions |
| title | Demand for weather hedges in India: An empirical exploration of theoretical predictions |
| title_full | Demand for weather hedges in India: An empirical exploration of theoretical predictions |
| title_fullStr | Demand for weather hedges in India: An empirical exploration of theoretical predictions |
| title_full_unstemmed | Demand for weather hedges in India: An empirical exploration of theoretical predictions |
| title_short | Demand for weather hedges in India: An empirical exploration of theoretical predictions |
| title_sort | demand for weather hedges in india an empirical exploration of theoretical predictions |
| topic | insurance economic analysis weather index insurance risk experimental design |
| url | https://hdl.handle.net/10568/153559 |
| work_keys_str_mv | AT hillruthvargas demandforweatherhedgesinindiaanempiricalexplorationoftheoreticalpredictions AT roblesmiguel demandforweatherhedgesinindiaanempiricalexplorationoftheoreticalpredictions AT ceballosfrancisco demandforweatherhedgesinindiaanempiricalexplorationoftheoreticalpredictions |