Publication Details

Category Text Publication
Reference Category Book chapters
DOI 10.2139/ssrn.1013549
Document author version
Title (Primary) Agro-biodiversity as natural insurance and the development of financial insurance markets
Title (Secondary) Agrobiodiversity, conservation and economic development
Author Baumgärtner, S.; Quaas, M.
Publisher Kontoleon, A.; Pascual, U.; Smale, M.
Source Titel Routledge Explorations in Environmental Economics
Year 2009
Department OEKON; OESA
Volume 11
Page From 293
Page To 317
Language englisch
Keywords agro-biodiversity; ecosystem services; agro-ecosystem management; insurance; risk-aversion; uncertainty
Abstract Agro-biodiversity can provide natural insurance to risk averse farmers. We employ a conceptual ecological-economic model to analyze the choice of agro-biodiversity by risk averse farmers who have access to financial insurance. We study the implications for individually and socially optimal agro-ecosystem management and policy design when on-farm agro-biodiversity, through ecosystem processes at higher hierarchical levels, generates a positive externality on other farmers. We show that for the individual farmer natural insurance from agro-biodiversty and financial insurance are substitutes. Whilean improved access to financial insurance leads to lower agro-biodiversity, the effects on the market failure problem (due to the external benefits of on-farm agro-biodiversity) and on welfare are determined by properties of the agro-ecosystem and agro-biodiversity's external benefits. We derive a specific condition on agro-ecosystem functioning under which, if financial insurance becomes more accessible, welfare in the absence of regulation increases or decreases.
Persistent UFZ Identifier https://www.ufz.de/index.php?en=20939&ufzPublicationIdentifier=27016
Baumgärtner, S., Quaas, M. (2009):
Agro-biodiversity as natural insurance and the development of financial insurance markets
In: Kontoleon, A., Pascual, U., Smale, M. (eds.)
Agrobiodiversity, conservation and economic development
Routledge Explorations in Environmental Economics 11
Routledge, London, p. 293 - 317 10.2139/ssrn.1013549