Pitfalls and potential of institutional change: rain-index insurance and the sustainability of rangeland management

Arbeitspapier

Rain-index insurance is strongly advocated in many parts of the developing world to help farmers to cope with climatic risk that prevail in (semi-)arid rangelands due to low and highly uncertain rainfall. We present a modeling analysis of how the availability of rain-index insurance affects the sustainability of rangeland management. We show that a rain-index insurance with frequent payoffs, i.e. a high strike level, leads to the choice of less sustainable grazing management than without insurance available. However, a rain-index insurance with a low to medium strike level enhances the farmer's well-being while not impairing the sustainability of rangeland management.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper Series in Economics ; No. 149

Classification and Topics

• Classification: Wirtschaft ; Criteria for Decision-Making under Risk and Uncertainty ; Insurance; Insurance Companies; Actuarial Studies ; Agricultural Finance ; Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth ; Ecological Economics: Ecosystem Services; Biodiversity Conservation; Bioeconomics; Industrial Ecology
• Subject: Ecological-economic modeling ; weather-index insurance ; Namibia ; grazing management ; risk ; sustainability ; weather-based derivatives

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Müller, Birgit ; Quaas, Martin ; Frank, Karin ; Baumgärtner, Stefan
• Event: Veröffentlichung
• (who): Leuphana Universität Lüneburg, Institut für Volkswirtschaftslehre
• (where): Lüneburg
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/30235
• Last update: 10.03.2025, 11:45 AM CET