Purpose

Hailstorms are a major risk in agriculture. In order to mitigate the negative consequences on farm revenues, in the present paper the authors analyse the choice between insurance contracts and anti-hail nets. Furthermore, the authors discuss the consequences of anti-hail nets adoption on the actuarial soundness of the insurance market.

Design/methodology/approach

In this paper the authors firstly develop a theoretical model based on expected utility theory to compare the profitability of no-hedging against insurance and anti-hail nets. Subsequently, they test their theoretical model predictions with data of South Tyrolean apple producers.

Findings

The authors find that the benefit of anti-hail nets compared to insurance is an increasing function of the overall risk of hail damages, of the farmers' level of risk aversion and of the worth of the agricultural output.

Practical implications

Given the authors’ findings that anti-hail nets are more profitable for riskier, risk-averse and high-profitable farmers, the diffusion of anti-hail nets could be beneficial for the actuarial soundness of insurance markets.

Originality/value

The model developed in the paper is specifically designed to compare the profitability of different agricultural hedging options and can be easily extended to cover other hazards.

中文翻译：

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苹果生产者在冰雹保险和防雹网之间的选择

目的

冰雹是农业的主要风险。为了减轻对农场收入的负面影响，在本文中，作者分析了保险合同和防雹网之间的选择。此外，作者还讨论了采用防雹网对保险市场精算稳健性的影响。

设计/方法/方法

在本文中，作者首先开发了一个基于预期效用理论的理论模型，以比较无对冲与保险和防雹网的盈利能力。随后，他们用南蒂罗尔苹果生产商的数据测试了他们的理论模型预测。

发现

作者发现，与保险相比，防雹网的好处是冰雹损害的总体风险、农民的风险规避程度和农业产出的价值的递增函数。

实际影响

鉴于作者的研究结果表明，防雹网对风险较高、规避风险和高利润的农民来说更有利可图，防雹网的传播可能有利于保险市场的精算稳健性。

原创性/价值

本文开发的模型专门用于比较不同农业对冲选项的盈利能力，并且可以轻松扩展以涵盖其他危害。