A PRIMER ON WEATHER DERIVATIVES

BARRIEU, P. *, and SCAILLET, O. **

* London School of Economics ** HEC Genève and Swiss Finance Institute

 

Abstract

We give a short introduction to weather derivatives. We discuss what they are made for. We describe the markets on which they are exchanged, and how they are used to promote agricultural risk transfer in developing countries via the World Bank program. We also treat some specific issues such as basis risk, pricing and design.

Keywords : weather derivatives, World Bank program.

JEL : G12, G13, Q54.