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Title:Pitfalls and potential of institutional change: rain-index insurance and the sustainability of rangeland management PDF Logo
Authors:Müller, Birgit
Quaas, Martin
Frank, Karin
Baumgärtner, Stefan
Issue Date:2009
Series/Report no.:University of Lüneburg Working Paper Series in Economics 149
Abstract: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.
Subjects:Ecological-economic modeling
weather-index insurance
Namibia
grazing management
risk
sustainability
weather-based derivatives
JEL:D81
G22
Q14
Q56
Q57
Document Type:Working Paper
Appears in Collections:Working Paper Series in Economics, Leuphana Universität Lüneburg

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