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Library Improving humanitarian response to slow-onset disasters using famine indexed weather derivatives

Improving humanitarian response to slow-onset disasters using famine indexed weather derivatives

Improving humanitarian response to slow-onset disasters using famine indexed weather derivatives

Resource information

Date of publication
December 2008
Resource Language
ISBN / Resource ID
handle:10568/910
License of the resource

This paper illustrates how weather derivatives indexed to forecasts of famine can be designed and used by operational agencies and donors to facilitate timely and reliable financing, for effective emergency response to climate-based, slow-onset disasters such as drought. We provide a general framework for derivative contracts, especially in the context of index insurance and famine catastrophe bond, and show how they can be used to complement existing tools and facilities in drought risk financing through a risk-layering strategy. We use the case of arid lands of northern Kenya, where rainfall proves a strong predictor of widespread and severe child wasting, to provide a simple empirical illustration of the potential contract designs.

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Authors and Publishers

Author(s), editor(s), contributor(s)

Chantarat, S.
Turvey, C.G.
Barrett, C.B.
Mude, A.G.

Data Provider
Geographical focus