Financial insurance for extreme events can play an important role in hedging against the implications of climate change. This paper combines a comprehensive estimation strategy and a unique panel dataset to study the role of financial insurance in farmers' welfare under uncertainty. Data are drawn from a large Italian farm panel dataset. We find that (i) demand for insurance products is likely to increase in response to climatic conditions, and (ii) that the use of insurance reduces the extent of risk exposure. We also find that farms growing more crops are less likely to adopt the insurance scheme. This confirms what is found in the theoretical literature. Crop diversification can be a substitute for financial insurance in hedging against the impact of risk exposure on welfare.

Crop Insurance as a Strategy for Adapting to Climate Change / Salvatore Di Falco; Felice Adinolfi; Martina Bozzola; Fabian Capitan. - In: JOURNAL OF AGRICULTURAL ECONOMICS. - ISSN 0021-857X. - STAMPA. - 65:2(2014), pp. 485-504. [10.1111/1477-9552.12053]

Crop Insurance as a Strategy for Adapting to Climate Change

ADINOLFI, FELICE;
2014

Abstract

Financial insurance for extreme events can play an important role in hedging against the implications of climate change. This paper combines a comprehensive estimation strategy and a unique panel dataset to study the role of financial insurance in farmers' welfare under uncertainty. Data are drawn from a large Italian farm panel dataset. We find that (i) demand for insurance products is likely to increase in response to climatic conditions, and (ii) that the use of insurance reduces the extent of risk exposure. We also find that farms growing more crops are less likely to adopt the insurance scheme. This confirms what is found in the theoretical literature. Crop diversification can be a substitute for financial insurance in hedging against the impact of risk exposure on welfare.
2014
Crop Insurance as a Strategy for Adapting to Climate Change / Salvatore Di Falco; Felice Adinolfi; Martina Bozzola; Fabian Capitan. - In: JOURNAL OF AGRICULTURAL ECONOMICS. - ISSN 0021-857X. - STAMPA. - 65:2(2014), pp. 485-504. [10.1111/1477-9552.12053]
Salvatore Di Falco; Felice Adinolfi; Martina Bozzola; Fabian Capitan
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/399109
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