Putting the Farmer in Farmer Risk Management: An Analysis of the Spatial Implications of Basis Risk in West Africa
General Material Designation
[Thesis]
First Statement of Responsibility
Blakeley, S. Lucille
Subsequent Statement of Responsibility
Sweeney, Stuart
.PUBLICATION, DISTRIBUTION, ETC
Name of Publisher, Distributor, etc.
University of California, Santa Barbara
Date of Publication, Distribution, etc.
2019
GENERAL NOTES
Text of Note
185 p.
DISSERTATION (THESIS) NOTE
Dissertation or thesis details and type of degree
Ph.D.
Body granting the degree
University of California, Santa Barbara
Text preceding or following the note
2019
SUMMARY OR ABSTRACT
Text of Note
Farmers in West Africa must balance their livelihoods against low inputs to their agriculture, long-term climate variability, as well as climate change. Index insurance is a risk management tool that is being used worldwide to address climate shocks. This tool is intended to be a safety net in poor growing years, and allows farmers to take productive risks in good cropping years to improve the farmersâ livelihoods. Index insurance uses weather indicators to determine payouts, and common indices often include rainfall or vegetative data to capture poor cropping conditions. Index insurance, while having many advantages over traditional insurance for farmers in developing countries, has one major drawback: basis risk. Basis risk is used to describe when an index insurance payout does not match the on-the-ground experiences of the farmers. Basis risk occurs for many reasons, ranging from a poor calibration of an index to capture bad cropping conditions to a disagreement in the measurement used for an index and an on the ground experience to poor communication between farmers and the insurers of an index. This dissertation aims to reduce basis risk complications for index insurance. The following chapters address basis risk in three ways. Firstly, this dissertation addresses measurement error through exploring different datasets, and finds that rainfall and reference evapotranspiration can capture different years for payouts. In the long term, using a combination of the two datasets might be the best method to capture poor cropping conditions. Secondly, this dissertation explores how the relationship between sea surface temperatures in the Atlantic and rainfall in West Africa might be leveraged to better understand future simulations of rainfall. The methodology established from this relationship shows that the trend of the rainfall and sea surface temperatures can be captured, ultimately pointing to a potential need to reassess how indices are constructed to accommodate long term climate variability. Finally, this dissertation addresses farmer preferences for purchasing insurance under different educational tutorials. This chapter uses an economic approach in Senegal and finds that farmers show a preference for index insurance, indifferent from learning about basis risk in index insurance.