The newest findings point in the directions effective forecasts matter substantially in a farmer's decision for investments. As skill of forecasts vary, the more skilled the forecasts, the more influence the forecast has on investment decisions. This was experienced when reviewing evidence of such behavior between investments and amount of expected rainfall. With improved forecasting skills, there is an improvement on profits. The newest missing link would then drive towards a missing market: forecast insurance (insurance for weather departures from forecast).
This presentation is based on AMA Innovation Lab projects for the 2013 BASIS/I4 Technical Committee Meeting. This meeting gathered researchers affiliated with the Index Insurance Innovation Initiative (I4) at UC Davis.
This presentation took place in University of California Davis, United States.