Research Article
A Methodical Approach to Design and Valuation of Weather Derivatives in Agriculture
Table 5
The structure of specific-event contracts and the efficiency assessment.
| | Wheat | Barley |
| Region | Jihomoravský | Jihomoravský | Index | Air temperature | Air temperature | Critical month for crop yield formation (weights) | April | April | May | May | June | June | Strike 1 | 17.05°C | 16.18°C | Strike 2 | 15.80°C | 15.07°C | Type of regression function | Linear | Linear | | | | Type of option | Call | Call | Fixed price (CZK/t) | 4,600 | 3,700 | Tick | 1,834 CZK/1°C | 1,341 CZK/1°C |
| Strike 1 | | | Without basis risk | | | Reduction of sales variability | | | Reduction of average sales | | | With basis risk | | | Reduction of sales variability | | | Reduction of average sales | | | Contract price (CZK per 1 ha) | | |
| Strike 2 | | | Without basis risk | | | Reduction of sales variability | | | Reduction of average sales | | | With basis risk | | | Reduction of sales variability | | | Reduction of average sales | | | Contract price (CZK per 1 ha) | 1,000 | |
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Source: authors.
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