Agro-biodiversity as natural insurance and the development of financial insurance markets
Research output: Contributions to collected editions/works › Chapter › peer-review
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Agrobiodiversity conservation and economic development. ed. / Andreas Kontoleon; Unai Pascual; Melinda Smale. Abingdon: Routledge Taylor & Francis Group, 2008. p. 293-317.
Research output: Contributions to collected editions/works › Chapter › peer-review
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RIS
TY - CHAP
T1 - Agro-biodiversity as natural insurance and the development of financial insurance markets
AU - Baumgärtner, Stefan
AU - Quaas, Martin F.
PY - 2008/10/6
Y1 - 2008/10/6
N2 - Farmers traditionally grow a variety of crops in order to decrease the adverse impact of uncertain environmental and market conditions. That is, they use agro-biodiversity as a form of natural income insurance. In this chapter, we study how risk-averse farmers manage their portfolio of agro-biodiversity to hedge their income risk from uncertain environmental conditions, and how this management decision is being affected by the availability of financial insurance. Obviously, the two options-natural insurance through agrobiodiversity and financial insurance from the market-are substitutes for risk-averse farmers (Baumgärtner 2007). So, the price of financial insurance has an impact on the level of agro-biodiversity cultivated on the farm for riskmanagement purposes: as financial insurance becomes cheaper, it drives out agro-biodiversity as a form of natural insurance.
AB - Farmers traditionally grow a variety of crops in order to decrease the adverse impact of uncertain environmental and market conditions. That is, they use agro-biodiversity as a form of natural income insurance. In this chapter, we study how risk-averse farmers manage their portfolio of agro-biodiversity to hedge their income risk from uncertain environmental conditions, and how this management decision is being affected by the availability of financial insurance. Obviously, the two options-natural insurance through agrobiodiversity and financial insurance from the market-are substitutes for risk-averse farmers (Baumgärtner 2007). So, the price of financial insurance has an impact on the level of agro-biodiversity cultivated on the farm for riskmanagement purposes: as financial insurance becomes cheaper, it drives out agro-biodiversity as a form of natural insurance.
KW - Sustainability sciences, Management & Economics
KW - Economics
UR - http://www.scopus.com/inward/record.url?scp=84909418980&partnerID=8YFLogxK
UR - https://www.mendeley.com/catalogue/11d8feef-08fd-3ab2-8e89-e7db458b6eb5/
U2 - 10.4324/9780203890127
DO - 10.4324/9780203890127
M3 - Chapter
SN - 9780415619769
SN - 9780415465052
SP - 293
EP - 317
BT - Agrobiodiversity conservation and economic development
A2 - Kontoleon, Andreas
A2 - Pascual, Unai
A2 - Smale, Melinda
PB - Routledge Taylor & Francis Group
CY - Abingdon
ER -