@article{Makaudze:96183,
      recid = {96183},
      author = {Makaudze, Ephias M. and Miranda, Mario J.},
      title = {Catastrophic Drought Insurance based on the Remotely  Sensed Normalized Difference Vegetation Index for  Smallholder Farmers in Zimbabwe},
      address = {2009-12},
      number = {308-2016-5078},
      pages = {23},
      year = {2009},
      abstract = {Index insurance, which indemnifies agricultural producers  based on an objectively observable variable
that is highly  correlated with production losses but which cannot be  influenced by the producer, can
provide adequate protection  against catastrophic droughts without suffering from the  moral hazard and
adverse selection problems that typically  cause conventional agricultural insurance programs to  fail.
Using historical maize and cotton yield data from  nine districts in Zimbabwe, we find that  catastrophic
drought insurance contracts based on the  Normalized Difference Vegetation Index (NDVI) can  be
constructed whose indemnities exhibit higher  correlations with yield losses compared to the  conventional
rainfall index. In addition the NDVI contracts  can be offered within the 5–10 per cent premium  range
considered reasonably affordable to many poor  smallholder farmers in Zimbabwe.},
      url = {http://ageconsearch.umn.edu/record/96183},
      doi = {https://doi.org/10.22004/ag.econ.96183},
}