Improving index-based drought insurance in varying topography: evaluating basis risk based on perceptions of Nicaraguan hillside farmers

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dc.creatorKost, André
dc.creatorLäderach, Peter R.D.
dc.creatorMyles, Fisher
dc.creatorCook, Simon E.
dc.creatorGómez, Lorena
dc.date2012-12-11
dc.date2014-08-15T12:13:14Z
dc.date2014-08-15T12:13:14Z
dc.date.accessioned2026-06-27T14:37:17Z
dc.descriptionThis paper discusses a methodology to model precipitation indices and premium prices for index-based drought insurance for smallholders. Spatial basis risk, which is borne by the insured, is a problem, especially in variable topography. Also, site-specific drought risk needs to be estimated accurately in order to offer effective insurance cover and ensure financial sustainability of the insurance scheme. We explore farmers' perceptions on drought and spatial climate variability and draw conclusions concerning basis risk with regards to the proposed methodology. There are technically many options to represent natural heterogeneity in index insurance contracts while serving the customer adequately and keeping transaction costs low.
dc.identifierhttps://hdl.handle.net/10568/41975
dc.identifier.urihttp://hdl.handle.net/123456789/83473
dc.languageen
dc.publisherPublic Library of Science
dc.rightsOpen Access
dc.sourceKost A, Läderach P, Myles F, Cook SE, Gómez L. 2012. Improving index-based drought insurance in varying topography: evaluating basis risk based on perceptions of Nicaraguan hillside farmers. PLOS ONE 7(12):e51412.
dc.subjectagriculture
dc.subjectclimate
dc.subjectdrought
dc.subjectinsurance
dc.subjectsmallholders
dc.titleImproving index-based drought insurance in varying topography: evaluating basis risk based on perceptions of Nicaraguan hillside farmers
dc.typeJournal Article

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Centro Internacional de Agricultura Tropical (CIAT)