Study Findings on Risk Management Detailed by a Researcher at Bucharest University of Economic Studies (Using meteorological derivatives for weather risk management in agriculture. Theoretical approach): Risk Management

2023 AUG 15 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Data detailed on risk management have been presented. According to news reporting out of Bucharest University of Economic Studies by NewsRx editors, research stated, “The aim of this paper is to explore weather risk management by application of weather derivatives in agriculture and rate the hedging performance.”

Our news correspondents obtained a quote from the research from Bucharest University of Economic Studies: “Meteorological elements highly affect the agriculture sector by influencing the yield of many crops. Weather indices depending on temperature, rainfall and wind speed. The price of hedging is determined by using the Burn analysis applied to the index modeling method. By appliying the weather derivatives in weather risk management we can reduced the yield volatility in agriculture. As the study of Štulec (2017) showed, weather has had a growing impact on the global economy evolution in the last decades, approximately 80% of the world economy is directly or indirectly influenced to the weather. Leggio (2007) states that companies use weather derivatives to stimulate sales and diversify investment portfolios.”

According to the news reporters, the research concluded: “Contracts with meteorological derivatives make profit depending on the weather (Alexandridis and Zapranis, 2013a). The assets of these contracts are represented by weather indices because the weather is not a physical asset that can be traded.”

For more information on this research see: Using meteorological derivatives for weather risk management in agriculture. Theoretical approach. Junior Scientific Researcher, 2022,8(1-2):13-22. (Junior Scientific Researcher - http://www.jsrpublishing.com/). The publisher for Junior Scientific Researcher is Research Publishing SRL.

Our news editors report that more information may be obtained by contacting Robert-Adrian CANDOI-SAVU, Bucharest University of Economic Studies, Romania.

(Our reports deliver fact-based news of research and discoveries from around the world.)