Please use this identifier to cite or link to this item:
https://open.uns.ac.rs/handle/123456789/7661
Title: | Costs and profit in chamomile production using weather put option | Authors: | Marković, Todor Ivanović, Sanjin Pajić, Miloš |
Issue Date: | 1-Jan-2014 | Journal: | Custos e Agronegocio | Abstract: | Chamomile is very important medicinal and aromatic plant, and is used in many industries. The goal of this paper is to analyze the effect of risk elimination (effect of hedging) in production of chamomile in Serbia using weather put option based on the quantity of precipitation. The analysis is based on calculations of average costs of chamomile production per hectare, costs of agricultural mechanization, and determination of profit in chamomile production. To structure weather put option the key issue is calculation of option payoff and evaluation of risk price (fair premium) a buyer is willing to pay for risk transfer. Fair premium is determined by burn-rate method. Chamomile revenue is calculated with use of the weather derivatives and without them using stochastic simulation method. Calculations are performed by appropriate computer software (@Risk). Results have shown that use of weather put option is efficient only if production location is in the immediate vicinity of weather station and if the correlation between quantity of precipitation and chamomile yield is high. | URI: | https://open.uns.ac.rs/handle/123456789/7661 | ISSN: | 18082882 |
Appears in Collections: | POLJF Publikacije/Publications |
Show full item record
SCOPUSTM
Citations
1
checked on Feb 22, 2020
Page view(s)
12
Last Week
10
10
Last month
0
0
checked on May 3, 2024
Google ScholarTM
Check
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.