Work

Pricing a parametric model for drought risk in Lake Garda

Year: 2026

Type: conference-paper

Abstract: This paper develops a parametric drought insurance contract for maize cultivation in the Veneto coastal area of Lake Garda (Italy). Using historical precipitation data, kernel density estimation, extreme value theory, and Monte Carlo simulation, the study calibrates a rainfall trigger and estimates the actuarially fair premium. The results identify a 50 mm monthly precipitation threshold as the most suitable trigger and demonstrate that a fully non-parametric framework provides a robust and transparent approach for pricing parametric drought insurance and supporting climate adaptation in agriculture.

Source: Corporate Governance: Theory and the Best Practices

DOI: 10.22495/cgtbpp18

Author: Valentino Spolaore

Institution: University of Verona

Language: English

Topic: Agricultural risk and resilience

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Climate action, Zero hunger

Open Access status: hybrid

OpenAlex ID: W7214083602

FWCI:

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