Exploiting the Convergence of Evidence in Satellite Data for Advanced Weather Index Insurance Design

AbstractThe goal of drought-related weather index insurance (WII) is to protect smallholder farmers against the risk of weather shocks and to increase their agricultural productivity. Estimates of precipitation and vegetation greenness are the two dominant satellite datasets. However, ignoring additional moisture- and energy-related processes that influence the response of vegetation to rainfall leads to an incomplete representation of the hydrologic cycle. This study evaluates the added value of considering multiple independent satellite-based variables to design, calibrate, and validate weather insurance indices on the African continent. The satellite data include two rainfall datasets, soil moisture, the evaporative stress index (ESI), and vegetation greenness. We limit artificial advantages by resampling all datasets to the same spatial (0.25°) and temporal (monthly) resolution, although datasets with a higher spatial resolution might have an added value, if considered as the single source of informat...