Agricultural index insurance offers the promise of an affordable and sustainable insurance product for farmers that can help reduce their vulnerability to aggregate agricultural shocks such as large-scale drought or flooding. However, index insurance provides claim payments based on a trigger that is only imperfectly correlated with losses. This implies that it carries basis risk: it may provide claim payments in years when there are no losses, and...
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INFORMACIÓN
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2016/07/18
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Documento de trabajo sobre investigaciones relativas a políticas
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WPS7744
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1
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1
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2016/07/18
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Disclosed
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How to measure whether index insurance provides reliable protection
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basis risk
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