Flexible weather index insurance design with penalized splines

• Main Authors: Tan, Ken Seng, Zhang, Jinggong
• Other Authors: Nanyang Business School
• Format: Article
• Language: English
• Published: 2023
• Subjects: Business::Finance::Insurance; Weather Index Insurance; Penalized Spline
• Online Access: https://hdl.handle.net/10356/170137
• Institution: Nanyang Technological University

In this article, we propose a flexible framework for the design of weather index insurance (WII) based on penalized spline methods. The aim is to find the indemnity function that optimally characterizes the intricate relationship between agricultural production losses and weather variables and thus...