Systemic weather risk is a major obstacle for the formation of private (non- subsidized) crop insurance. This paper explores the possibility of spatial diversification of insurance by estimating the joint occurrence of unfavorable weather conditions in different locations. For that purpose...

Building on the idea that religious communities provide mutual insurance against some idiosyncratic risks, we argue that religious membership is more valuable in societies exposed to greater common risk. In our empirical analysis we exploit rainfall risk as a source of common economic risk in...

This study examines how basis ambiguity influences the demand for index insurance. Ambiguity is introduced into the statistical relationship between the loss and the index because they are more difficult to guess than the occurrence of the loss and the index individually. Basis ambiguity lowers...