Work

Basis Risk and Tariff Zoning in Area-yield Index Insurance for Wheat: Evidence From Surkhandarya Region, Uzbekistan

Year: 2026

Type: article

Abstract: Drawing on district-level wheat yield data for the 14 districts of Surkhandarya Region over 2005–2024 (254 observations), this paper quantifies the basis risk of an area-yield index insurance product and proposes a model of territorial tariff zones. The simulation results show that the regional index captures only 11 of the 41 loss events recorded in the districts (27%) and achieves a hedging effectiveness of 7.6%, whereas the district index achieves 51.5%. Although a weather index based on the number of hot days in spring is statistically significant in a panel model (p = 0.013), it exhibits negative hedging effectiveness at every trigger level. For a 10% deductible, two tariff zones are identified: a pure premium rate of 1.14% for the stable zone and 8.29% for the high-risk zone. The proposed mechanism reduces the premium expenditure of farmers in the stable zone from 148.3 thousand to 52.6 thousand UZS per hectare.

Source: ECONOSCITECH INTEGRATION

DOI: 10.5281/zenodo.24141510

Authors: Abdullayev, Alisher Sa'dulla oʻgʻli, Yadgarov, Akram Akbarovich

Institutions: Termez State University, Tashkent State University of Economics

Language: English

Topic: Agricultural risk and resilience

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: diamond

OpenAlex ID: W7225777919

FWCI:

Cites:

Cited by:

Related to: