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

Description

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, rain-index insurance with a low to medium strike level enhances the farmer's well-being while not impairing the sustainability of rangeland management.

Period	29.06.2011 → 02.07.2011
Event title	18th Annual Conference of the European Association of Environmental and Resource Economists - EAERE 2011
Event type	Conference
Conference number	18
Sponsors	European Association of Environmental and Resource Economists
Location	Rom, ItalyShow on map
Degree of Recognition	International