Multi-Site Bundling of Drought Tolerant Maize Varieties and Index Insurance

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dc.contributor.authorAwondo, Sebastain N.
dc.contributor.authorKostandini, Genti
dc.contributor.authorSetimela, Peter
dc.contributor.authorErenstein, Olaf
dc.contributor.otherUniversity of Alabama Tuscaloosa
dc.contributor.otherUniversity of Georgia
dc.contributor.otherCGIAR
dc.contributor.otherInternational Maize & Wheat Improvement Center (CIMMYT)
dc.date.accessioned2023-09-28T22:00:41Z
dc.date.available2023-09-28T22:00:41Z
dc.date.issued2020
dc.description.abstractDrought Tolerant Maize Varieties (DTMV) and Rainfall Index Insurance (RII) are potential complements, though with limited empirical basis. We employ a multivariate spatial framework to investigate the potential for bundling DTMV with a simulated multi-site and multi-environment RII, designed to insure against mild, moderate and severe drought risk. We use yield data from on-farm trials conducted by the International Maize and Wheat Improvement Center (CIMMYT) and partners over 49 locations in Eastern and Southern Africa spanning 8 countries and 5 mega-environments (dry lowland, dry mid altitude, wet lower mid altitude, low wetland and wet upper mid altitude) in which 19 different improved maize varieties including DTMV were tested at each location. Spatially correlated daily rainfall data are generated from a first-order two-state Markov chain process and used to calibrate the index and predict yields with a hierarchical Bayes multivariate spatial model. Results show high variation in the performance and benefits of different bundles which depend on the maize variety, the risk layer insured, and the type of environment, with high chances of selecting a sub-optimal and unattractive contract. We find that complementing RII with a specific DTMV produces contracts with lower premiums and higher guaranteed returns especially in dry lowland increasing the chances of scaling up RII within this environment.en_US
dc.format.mediumelectronic
dc.format.mimetypeapplication/pdf
dc.identifier.citationAwondo, S. N., Kostandini, G., Setimela, P., & Erenstein, O. (2019). Multi‐Site Bundling of Drought Tolerant Maize Varieties and Index Insurance. In Journal of Agricultural Economics (Vol. 71, Issue 1, pp. 239–259). Wiley. https://doi.org/10.1111/1477-9552.12344
dc.identifier.doi10.1111/1477-9552.12344
dc.identifier.orcidhttps://orcid.org/0000-0002-7491-5786
dc.identifier.orcidhttps://orcid.org/0000-0001-9575-1859
dc.identifier.urihttps://ir.ua.edu/handle/123456789/12068
dc.languageEnglish
dc.language.isoen_US
dc.publisherWiley
dc.rights.licenseAttribution 4.0 International (CC BY 4.0)
dc.rights.urihttps://creativecommons.org/licenses/by/4.0/
dc.subjectAfrica
dc.subjectdrought tolerant maize varieties
dc.subjectmega-environment
dc.subjectmulti-site index insurance
dc.subjectmultivariate hierarchical Bayes
dc.subjectRISK
dc.subjectCONSTRAINTS
dc.subjectEASTERN
dc.subjectAFRICA
dc.subjectAgricultural Economics & Policy
dc.subjectEconomics
dc.titleMulti-Site Bundling of Drought Tolerant Maize Varieties and Index Insuranceen_US
dc.typeArticle
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