Next Article in Journal
Stock Selection as a Problem in Phylogenetics—Evidence from the ASX
Next Article in Special Issue
Effectiveness of Weather Derivatives as a Risk Management Tool in Food Retail: The Case of Croatia
Previous Article in Journal
Capital Regulation and Bank Risk-Taking Behavior: Evidence from Pakistan
Article Menu

Export Article

Open AccessArticle
Int. J. Financial Stud. 2016, 4(3), 17;

Spatially-Aggregated Temperature Derivatives: Agricultural Risk Management in China

Department of Mathematical Sciences, Xi’an Jiaotong-Liverpool University, Suzhou 215123, China
Department of Business and Social Sciences, Salzburg University of Applied Sciences, Puch/Salzburg 5412, Austria
Author to whom correspondence should be addressed.
Academic Editors: Chi Keung Lau and Satish Sharma
Received: 11 March 2016 / Revised: 22 August 2016 / Accepted: 24 August 2016 / Published: 5 September 2016
Full-Text   |   PDF [2046 KB, uploaded 5 September 2016]   |  


In this paper, a new form of weather derivative contract, namely the climatic zone-based growth degree-day (GDD) contract, is introduced. The objective is to increase the risk management efficiency in the agricultural sector of China and to reduce the model dimension of multi-regional temperature-based weather derivatives pricing. Since the proposed contract serves as a risk management tool for all of the cities in the same climatic zone, we compare the risk hedging power between the climatic zone-based and the city-based GDD contracts. As a result, we find that the differences between the two types of temperature-based weather contracts are maintained within a certain range. View Full-Text
Keywords: agriculture; growth degree-day; risk management; weather derivatives agriculture; growth degree-day; risk management; weather derivatives

Figure 1

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

Share & Cite This Article

MDPI and ACS Style

Zong, L.; Ender, M. Spatially-Aggregated Temperature Derivatives: Agricultural Risk Management in China. Int. J. Financial Stud. 2016, 4, 17.

Show more citation formats Show less citations formats

Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Related Articles

Article Metrics

Article Access Statistics



[Return to top]
Int. J. Financial Stud. EISSN 2227-7072 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top