scholarly journals Weather derivatives and hedging the weather risks

2014 ◽  
Vol 60 (No. 7) ◽  
pp. 309-313 ◽  
Author(s):  
J. Taušer ◽  
R. Čajka
Keyword(s):  
Weather Conditions ◽  
Business Case ◽  
Main Issue ◽  
Weather Derivatives ◽  
Advantages And Disadvantages ◽  
Financial Products ◽  
Hedging Effectiveness ◽  
Weather Risks

The article focuses on weather derivatives with the aim to present the substance of weather derivatives as relatively new financial products and to discuss their advantages and disadvantages when being used as a tool to diminish the loses coming from these suboptimal weather conditions. We conclude with the findings that weather derivatives have a great potential to develop further. They provide an opportunity to hedge against the suboptimal weather conditions at reasonable costs. However, the hedging effectiveness is the main issue to be analyzed in each specific business case.  

scholarly journals A Methodical Approach to Design and Valuation of Weather Derivatives in Agriculture

2013 ◽  
Vol 2013 ◽  
pp. 1-8 ◽  
Author(s):  
Jindrich Spicka ◽  
Jiri Hnilica
Keyword(s):  
Risk Management ◽  
Low Income ◽  
Crop Yields ◽  
Option Price ◽  
Interdisciplinary Approach ◽  
Weather Conditions ◽  
Low Income Countries ◽  
Management Tool ◽  
Weather Derivatives ◽  
Methodical Approach

The paper deals with weather derivatives as the potentially effective risk management tool for agricultural enterprises seeking to mitigate their income exposure to variations in weather conditions. Design and valuation of the weather derivatives is an interdisciplinary approach covering agrometeorology, statistics, mathematical modeling, and financial and risk management. This paper first offers an overview of data sources and then methods of design and valuation of weather derivatives at the regional level. The accompanied case study focuses on cultivation of cereals (wheat and barley) in the Czech Republic. However, its generalizability is straightforward. The analysis of key growing phases of cereals is based on regression analysis using weather indices as the independent variables and crop yields as dependent variables. With the bootstrap tool, the burn analysis is considered as useful tool for estimating uncertainty about the payoff, option price, and statistics of probability distribution of revenues. The results show that the spatial and production basis risks reduce the efficiency of the weather derivatives. Finally, the potential for expansion of weather derivatives remains in the low income countries of Africa and Asia with systemic weather risk.

Comparing the Hedging Effectiveness of Weather Derivatives Based on Remotely Sensed Vegetation Health Indices and Meteorological Indices

2018 ◽  
Vol 11 (1) ◽  
pp. 33-48 ◽  
Author(s):  
Johannes Möllmann ◽  
Matthias Buchholz ◽  
Oliver Musshoff
Keyword(s):  
Winter Wheat ◽  
Wheat Yield ◽  
Condition Index ◽  
Remotely Sensed ◽  
Weather Derivatives ◽  
Basis Risk ◽  
Hedging Effectiveness ◽  
Winter Wheat Yield ◽  
Vegetation Health ◽  
Northeastern Germany

Abstract Weather derivatives are considered a promising agricultural risk management tool. Station-based meteorological indices typically provide the data underlying these instruments. However, the main shortcoming of these weather derivatives is an imperfect correlation between the weather index and the yield of the insured crop, called basis risk. This paper considers three available remotely sensed vegetation health (VH) indices, namely, the vegetation condition index (VCI), the temperature condition index (TCI), and the vegetation health index (VHI), as indices for weather derivatives in a German case study. We investigated the correlation and period of highest correlation with winter wheat yield. Moreover, we analyzed whether the use of remotely sensed VH indices for weather derivatives can reduce basis risk and thus improve the performance of weather derivatives. The two commonly used meteorological indices, precipitation and temperature sums, were employed as benchmarks. Quantile regression and index value simulation were used for the design and pricing of the weather derivatives. The analysis for the selected farms and corresponding counties in northeastern Germany revealed that, on average, the VHI resulted in the highest correlation with winter wheat yield, and VHI-based weather derivatives were also superior in terms of the hedging effectiveness. The total periods of the highest correlations ranged from the beginning of April to the end of July. VHI- and VCI-based weather derivatives led to statistically significant reductions of basis risk, compared to the benchmarks. Our results indicate that the VHI-based weather derivatives can be useful alternatives to meteorological indices, especially in regions with sparser weather station networks.

scholarly journals Mapping users' expectations regarding extended-range forecasts

2018 ◽  
Vol 15 ◽  
pp. 99-106 ◽  
Author(s):  
Tiina Ervasti ◽  
Hilppa Gregow ◽  
Andrea Vajda ◽  
Terhi K. Laurila ◽  
Antti Mäkelä
Keyword(s):  
Everyday Life ◽  
Design Process ◽  
General Public ◽  
Online Survey ◽  
Weather Conditions ◽  
The Everyday ◽  
Extended Range ◽  
One Year ◽  
Weather Risks ◽  
Range Forecasts

Abstract. An online survey was used to map the needs and preferences of the Finnish general public concerning extended-range forecasts and their presentation. First analyses of the survey were used to guide the co-design process of novel extended-range forecasts to be developed and tested during the project. In addition, the survey was used to engage the respondents from the general public to participate in a one year piloting phase that started in June 2017. The respondents considered that the tailored extended-range forecasts would be beneficial in planning activities, preparing for the weather risks and scheduling the everyday life. The respondents also perceived the information about the impacts of weather conditions more important than advice on how to prepare for the impacts.

scholarly journals Weather Literacy in Times of Climate Change

2020 ◽  
Vol 12 (3) ◽  
pp. 435-452 ◽  
Author(s):  
Nadine Fleischhut ◽  
Stefan M. Herzog ◽  
Ralph Hertwig
Keyword(s):  
Climate Change ◽  
Weather Conditions ◽  
Extreme Weather ◽  
Extreme Weather Events ◽  
The Public ◽  
Weather Events ◽  
The Future ◽  
Nationally Representative ◽  
And Migration ◽  
Weather Risks

AbstractAs climate change unfolds, extreme weather events are on the rise worldwide. According to experts, extreme weather risks already outrank those of terrorism and migration in likelihood and impact. But how well does the public understand weather risks and forecast uncertainty and thus grasp the amplified weather risks that climate change poses for the future? In a nationally representative survey (N = 1004; Germany), we tested the public’s weather literacy and awareness of climate change using 62 factual questions. Many respondents misjudged important weather risks (e.g., they were unaware that UV radiation can be higher under patchy cloud cover than on a cloudless day) and struggled to connect weather conditions to their impacts (e.g., they overestimated the distance to a thunderstorm). Most misinterpreted a probabilistic forecast deterministically, yet they strongly underestimated the uncertainty of deterministic forecasts. Respondents with higher weather literacy obtained weather information more often and spent more time outside but were not more educated. Those better informed about climate change were only slightly more weather literate. Overall, the public does not seem well equipped to anticipate weather risks in the here and now and may thus also fail to fully grasp what climate change implies for the future. These deficits in weather literacy highlight the need for impact forecasts that translate what the weather may be into what the weather may do and for transparent communication of uncertainty to the public. Boosting weather literacy may help to improve the public’s understanding of weather and climate change risks, thereby fostering informed decisions and mitigation support.

scholarly journals ХЕДЖУВАННЯ ЕКОЛОГІЧНИХ РИЗИКІВ ПІДПРИЄМНИЦЬКОЇ ДІЯЛЬНОСТІ: МІЖНАРОДНА ПРАКТИКА

2020 ◽  
pp. 30-36
Author(s):  
Череп А.В. ◽  
Каткова Н.В.
Keyword(s):  
Management Strategies ◽  
Weather Conditions ◽  
Environmental Risks ◽  
Exchange Traded Funds ◽  
Financial Instruments ◽  
Weather Derivatives ◽  
Degree Days ◽  
Forward Contracts ◽  
Investment Funds ◽  
Futures And Options

The article discusses hedging tools and insurance of environmental risks used in international practice. It was noted that so-called environmental derivatives are used as financial instruments for hedging environmental risks. Environmental derivatives are financial instruments that can be used by organizations or individuals to reduce the risk of adverse and unforeseen weather conditions or environmental catastrophes (in particular, weather derivatives, carbon credits and greenhouse gases emissions quotas, as well as futures and options for them, exchange trade funds based on ESG indicators, including environmental, social and management strategies). The main types of weather and carbon derivatives, as well as ways to trade them are considered. Thus, weather derivatives are usually based on an index that measures a certain weather aspect: cooling degree days, heating degree days, snowfall, snow depth, wind speed or chill level. Weather options and futures for trading (call) and put (put) are traded on exchanges, and on the over-thecounter markets (OTC) weather derivatives take various forms - from swaps to forward contracts. Carbon financial instruments include such as tradable pollution permits and credits, green trade, carbon derivatives, natural securities, carbon investment funds. The following carbon assets are traded on the EU spot carbon market: EU quotas, EU aviation quotas, certified emission reductionunits, emission reduction units. There are primary and secondary markets for carbon assets, as well as a market for derivatives — futures and options for quotas. Index exchange traded funds (ETFs), which are formed on the basis of ESG indicators (environmental, social and management strategies), are also considered as a tool for hedging environmental risks. Environmental, social and management strategies are increasingly popular in the indexing and ETF industries as investors seek to apply social values to investment portfolios.

scholarly journals PECULIARITIES OF CONSTRUCTION OF GEODESIC NETWORK FOR DEVELOPMENT OF OPEN MINERAL DEPOSITS

2020 ◽  
Vol 11 (87) ◽  
Author(s):  
Oksana Serant ◽  
◽  
Olena Kubrak ◽  
Nataliia Yarema ◽  
Maksym Batura ◽  
...  
Keyword(s):  
Geodetic Network ◽  
Cost Effective ◽  
Weather Conditions ◽  
Reference Network ◽  
Satellite Measurement ◽  
Geodetic Networks ◽  
Advantages And Disadvantages ◽  
Adverse Weather ◽  
The Creation ◽  
Combination Of Methods

The creation of geodetic networks for open deposits has its own characteristics, in contrast to the creation of conventional geodetic networks. Surveying networks of support points for groups of quarries and individual quarries located in developed mining regions, as well as in large industrial, hydraulic and agricultural structures adjacent to cities, are being developed on the basis of existing networks of higher-class triangulation points. In the absence of higher-class triangulation points, open source support networks are created independently. The study of geodetic monitoring in mining, especially in deposits that are developed in an open way. The design of geodetic reference networks depends entirely on the shape of the quarry and the system of its opening. According to its form, choose the method of creating a planned geodetic basis. For the most part, a backbone network is created to further condense and create a film network.After analyzing the methods of creating a spatial reference network for open deposits, we concluded that the classical methods of creating a planned-height geodetic network on the territory of the mining enterprise are time-consuming, long-term and economically unprofitable. The GNSS method is the best for creating such networks at present. Of course, it cannot fully replace all methods due to various constraints, such as interference, lack of communication, and adverse weather conditions. Therefore, given the advantages and disadvantages of the methods analyzed in the article to create spatial networks in open fields, the authors consider it appropriate to combine the GNSS method with polygonometry, as the use of only satellite measurement method is impractical, but in combination with polygonometry -altitude networks for geodetic works. This combination significantly reduces measurement time, is less time-consuming, cost-effective and meets the accuracy requirements of the relevant networks. Approbation of the combination of methods for the creation of a spatial geodetic network for monitoring the open field was carried out at the Vilnohirsk mining and metallurgical plant.

scholarly journals Weather derivatives: Business hedge instrument from weather risks

Bankarstvo ◽  
2014 ◽  
Vol 43 (6) ◽  
pp. 156-179
Author(s):  
Bojan Djordjevic ◽  
Mira Djordjevic
Keyword(s):  
Weather Derivatives ◽  
Weather Risks

Relationship Between the Scale, Structure, Efficiency and Economic Growth of Tobacco Financial Development in China

2021 ◽  
Vol 7 (4) ◽  
pp. 432-442
Author(s):  
Yi Zhang ◽  
Shuwang Yang ◽  
Hang Zhang
Keyword(s):  
Economic Growth ◽  
Supply Chain ◽  
Financial Development ◽  
Tobacco Industry ◽  
Case Analysis ◽  
Scale Structure ◽  
Advantages And Disadvantages ◽  
Financial Products ◽  
Operation Process ◽  
The Government

Objectives: This paper analyzes and studies the relationship between the scale, structure, efficiency and economic growth of tobacco financial development in China. Methods: Through the research on the theory of supply chain finance, this paper studies the products and application of the financial chain in the tobacco industry by using the methods of case analysis, literature research and case analysis. At the same time, taking the products of a bank as an example, this paper describes the product handling and operation process in detail, and analyzes the advantages and disadvantages of the products. Results: Commercial banks at home and abroad have gradually realized the power of the vigorous development of tobacco financial supply chain and actively developed tobacco supply chain financial products. The promotion of China's bank supply chain financial products at this stage will help banks to improve and adjust the traditional credit business structure. At the same time, it helps to improve and optimize the structure of tobacco customers and enhance the business cooperation between tobacco companies and banks. This can reduce the business risk of the tobacco industry and improve the overall profitability of the tobacco industry. Conclusion: The tobacco industry should steadily take advantage of the organization and coordination advantages of the government and make use of development financial funds to overcome difficulties. Only by improving the design and enlarging the leverage of financial support policies can the tobacco industry further develop.

REVIEW OF TRAFFIC DATA COLLECTION METHODS FOR DRIVERS’ CAR – FOLLOWING BEHAVIOUR UNDER VARIOUS WEATHER CONDITIONS

2016 ◽  
Vol 78 (4) ◽  
Author(s):  
Mey Shariff ◽  
Othman Che Puan ◽  
Nordiana Mashros
Keyword(s):  
Data Collection ◽  
Driving Simulator ◽  
Weather Conditions ◽  
Traffic Data ◽  
Car Following ◽  
Advantages And Disadvantages ◽  
Adverse Weather Conditions ◽  
Traffic Data Collection ◽  
Comparative Review ◽  
Adverse Weather

Adverse weather conditions have considerable impact on traffic operation and safety as it affects drivers’ car-following behaviour. However, the quality of traffic data and its related methodologies to address these effects are under continuous enhancement. This paper intends to provide an overview of various empirical traffic data collection methodologies widely used to investigate drivers car-following behaviour under various weather conditions. These methodologies include video cameras, pneumatic tubes, floating car data, instrumented vehicle and driving simulator. Moreover, the advantages and disadvantages related to methodologies have been discussed with emphasis on their suitability to work under adverse weather conditions. Furthermore, conclusion also comprises on table format of comparative review of facilities concerned with the methodologies.  

scholarly journals STUDY OF THE LED REMOVABLE NOZZLE ON THE REFLECTOR OF AN ELECTRON TOTAL STATION

2020 ◽  
Vol 1 (1) ◽  
pp. 64-73
Author(s):  
Petr P. Murzintsev ◽  
Alexey V. Novikov ◽  
Alexander S. Repin
Keyword(s):  
Weather Conditions ◽  
Instrument Making ◽  
Total Station ◽  
Advantages And Disadvantages ◽  
Geodetic Measurements ◽  
Bad Weather

The article presents the results of a study of a removable LED nozzle on the reflector of an electronic total station. A description of the LED removable nozzle on the reflector of the electronic total station is made. The results of measurements of the runtime of pointing the device at the reflector at night, at various distances and in bad weather conditions (snowfall) are presented. A comparison between the results of studies with different backlight modes of the total station reflector is made. Models of reflectors with pulsed illumination manufactured by various instrument-making enterprises and their cost are given. Based on the results of the studies and analysis, conclusions on the use of a removable LED nozzle for performing geodetic measurements in the production of engineering and geodetic surveys and other types of geodetic works are drawn. The advantages and disadvantages of the LED removable nozzle are given.

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