Explaining index based livestock insurance to pastoralists

Livestock production in arid and semi-arid rangelands is a risky enterprise. Covariate risk of catastrophic livestock loss due to drought is the most critical uninsured risk facing livestock producers. These losses can lead to persistent poverty. We are trying to design an index based livestock insurance (IBLI) program as a viable means to help pastoralists in northern Kenya manage such covariate risk of livestock losses due to drought. A predicted livestock mortality index – established from a statistical relationship between satellite-generated vegetation imagery and historical records of community level livestock losses – represents an objectively, cost effectively measured and non-human manipulable index that triggers insurance payout. The insurance is offered by private insurance companies. The advantages of reduced transaction costs and asymmetric information problems, however, come at the cost of increased basis risk, which refers to the imperfect correlation between an insured‟s loss experience and the index. We have developed a game that explains to pastoralists how such an insurance product could work. We built in the game both covariate and idiosyncratic shocks, and use a subsistence constraint to generate bifurcating asset dynamics, observed empirically in the targeted communities. This paper describes how the game was designed, how it was used in the field, and presents findings on how individuals played the game. The paper concludes by discussing how these findings are being used in the design and broader extension of the index based insurance product

A Quantum Bousso Bound

The Bousso bound requires that one quarter the area of a closed codimension two spacelike surface exceeds the entropy flux across a certain lightsheet terminating on the surface. The bound can be violated by quantum effects such as Hawking radiation. It is proposed that at the quantum level the bound be modified by adding to the area the quantum entanglement entropy across the surface. The validity of this quantum Bousso bound is proven in a two-dimensional large N dilaton gravity theory.Comment: 17 page

PP-Wave / CFT_2 Duality

We investigate the pp-wave limit of the AdS_3\times S^3\times K3 compactification of Type IIB string theory from the point of view of the dual Sym_N(K3) CFT. It is proposed that a fundamental string in this pp-wave geometry is dual to the c=6 effective string of the Sym_N(K3) CFT, with the string bits of the latter being composed of twist operators. The massive fundamental string oscillators correspond to certain twisted Virasoro generators in the effective string. It is shown that both the ground states and the genus expansion parameter (at least in the orbifold limit of the CFT) coincide. Surprisingly the latter scales like J^2/N rather than the J^4/N^2 which might have been expected. We demonstrate a leading-order agreement between the pp-wave and CFT particle spectra. For a degenerate special case (one NS 5-brane) an intriguing complete agreement is found.Comment: JHEP3 LaTeX, 20 pages; discussion of WZW levels clarified, reference adde

Altering poverty dynamics with index insurance: northern Kenya’s HSNP+

Abstract not available

Diffusive and convective transfer of cytokine-inducing bacterial products across hemodialysis membranes

Diffusive and convective transfer of cytokine-inducing bacterial products across hemodialysis membranes. The widespread use of bicarbonate dialysate, and high-flux and high-efficiency dialyzers have raised concerns regarding the transmembrane passage of bacterial products from the dialysate into the blood compartment. To study the mechanisms as well as magnitude of the transmembrane transfer of bacterial products from the dialysate, we developed a computerized in vitro dialysis model which provides continuous pressure recording from the arterial, venous, dialysate inflow and outflow ports. By virtue of a computer controlled on-line infusion pump, this model permits control of ultrafiltration/backfiltration. Heparinized (10 U/ml) whole blood (150 ml) was circulated through the blood compartment for 120 minutes at 100ml/min. Bicarbonate dialysate contaminated with Pseudomonas maltophilia filtrate was circulated through the dialysate compartment at 100ml/min. A two-point pressure of +10mm of Hg (ultrafiltration) was maintained for the first 60 minutes and -10mm of Hg (backfiltration) for the next 60 minutes. Whole blood samples (10 ml) were drawn from the blood at 0, 60 and 120 minutes. Peripheral blood mononuclear cells (PBMC) harvested from these samples were incubated for 24 hours in tissue culture medium. In addition, 0.5ml samples of dialysate were collected at 0, 60 and 120 minutes and incubated with PBMC from the same donor for 24 hours. After 24 hour incubation, total cell-associated IL-1Ra and IL-1β were measured by specific radioimmunoassay. Paired experiments were performed with eight high-flux synthetic membranes (polyamide) and eight low-flux cellulose membranes (hemophan). Cytokine production is expressed as pg/2.5 million PBMC. During the mandatory ultrafiltration phase of the experiment (first hour), the production of IL-1Ra by PBMC from the blood compartment rose from 515 ± 118 to 785 ± 209 with polyamide membranes, and from 1175 ± 365 to 3865 ± 1847 with hemophan membranes, suggesting diffusive transport of bacterial products across the membrane. In contrast, at the end of the backfiltration phase (second hour), there was no further rise in the production of IL-1Ra by PBMC from the blood compartment (702 ± 123 with polyamide, and 2284 ± 886 with hemophan). The production of IL-1Ra by PBMC harvested from the blood compartment of polyamide membranes at 0, 60 and 120 minutes was lower than that with hemophan membranes (P = 0.01). In contrast to IL-1Ra, the production of IL-1β by PBMC harvested from the blood compartment with both membranes was uniformly low. The results of this study demonstrate the diffusive transfer of bacterial products across dialysis membranes. Therefore, any condition that increases diffusive transport such as dialyzers with large surface areas and high blood and dialysate flow rates could potentially increase the reverse transfer of bacterial products from the dialysate. This risk is not greater for synthetic high-flux membranes such as polyamide. Further, IL-1β is a less sensitive indicator than IL-1Ra of the transmembrane passage of cytokine-inducing substances from the dialysate to blood compartment

Exploring temporal aspects of climate-change effects due to bioenergy

The greenhouse gas emissions associated with bioenergy are often temporally dispersed and can be a mixture of long-term forcers (such as carbon dioxide) and short-term forcers (such as methane). These factors affect the timing and magnitude of climate-change impacts associated with bioenergy in ways that cannot be clearly communicated with a single metric. This is critical as key comparisons that determine incentives and policy for bioenergy are based upon climate-change impacts expressed as carbon dioxide equivalent calculated with GWP100. This paper explores these issues further and presents a spreadsheet tool to facilitate quick assessment of these temporal effects. The potential effect of (i) a mix of GHGs and (ii) emissions that change with time are illustrated through two case studies. In case study 1, variations in the mix of greenhouse gases mean that apparently similar impacts after 100-years, mask radically different impacts before then. In case study 2, variations in the timing of emissions cause their climate-change impacts (integrated radiative-forcing and temperature change) to differ from the impacts that an emissions-balance would suggest. The effect of taking alternative approaches to considering “CO2-equivalence” are also assessed. In both cases, a single metric for climate-change effects was found to be wanting. A simple tool has been produced to help practitioners evaluate whether this is the case for any given system. If complex dynamics are apparent, it is recommended that additional metrics, more detailed inventory, or full time-series impact results are used in order to accurately communicate these climate-change effects.</p

Insuring against drought-related livestock mortality: Piloting index-based livestock insurance in northern Kenya

Climate related shocks are among the leading cause of production and efficiency losses in smallholder crop and livestock production in rural Africa. Consequently, the identification of tools to help manage the risks associated with climactic extremities is increasingly considered to be among the key pillars of any agenda to enhance agricultural growth and welfare in rural Africa. This paper describes the application of a promising innovation in insurance design – index-based insurance – that seeks to bring the benefits of formal insurance to help manage the weather-related risks faced by rural crop and livestock producers in low-income countries. In particular, we highlight the research and development agenda of a comprehensive effort to design commercially viable index based livestock insurance aimed at protecting the pastoral populations of northern Kenya from the considerable drought-related livestock mortality risk that they face. Detailing the conditions that make the pastoral economy in northern Kenya an ideal candidate for the provision of indexbased insurance products, the paper describes the contract design, defines its structure, offers analysis that indicates a high likelihood of commercial sustainability among the target market and describes the process of implementation leading up to the launch of a pilot in Marsabit District of northern Kenya in early 2010

Insuring against drought‐related livestock mortality: Piloting index based livestock insurance in northern Kenya

Climate related shocks are among the leading cause of production and efficiency losses in smallholder crop and livestock production in rural Africa. Consequently, the identification of tools to help manage the risks associated with climactic extremities is increasingly considered to be amongst the key pillars of any agenda to enhance agricultural growth and welfare in rural Africa. This paper describes the application of a promising innovation in insurance design – index‐based insurance – that seeks to bring the benefits of formal insurance to help manage the weather‐related risks faced by rural crop and livestock producers in low‐income countries. In particular, we highlight the research and development agenda of a comprehensive effort to design commercially viable index‐based livestock insurance aimed at protecting the pastoral populations of Northern Kenya from the considerable drought‐related livestock mortality risk that they face. Detailing the conditions that make the pastoral economy in Northern Kenya an ideal candidate for the provision of index‐based insurance products, the paper describes the contract design, defines its structure, offers analysis that indicates a high likelihood of commercial sustainability among the target market and describes the process of implementation leading up to the launch of a pilot in Marsabit district of Northern Kenya in early 2010

Longevity hedge effectiveness: A decomposition

We use a case study of a pension plan wishing to hedge the longevity risk in its pension liabilities at a future date. The plan has the choice of using either a customised hedge or an index hedge, with the degree of hedge effectiveness being closely related to the correlation between the value of the hedge and the value of the pension liability. The key contribution of this paper is to show how correlation and, therefore, hedge effectiveness can be broken down into contributions from a number of distinct types of risk factors. Our decomposition of the correlation indicates that population basis risk has a significant influence on the correlation. But recalibration risk as well as the length of the recalibration window are also important, as is cohort effect uncertainty. Having accounted for recalibration risk, additional parameter uncertainty has only a marginal impact on hedge effectiveness. Finally, the inclusion of Poisson risk only starts to become significant when the smaller population falls below about 10,000 members over age 50. Our case study shows that, at least for medium and large pension plans, longevity risk can be substantially hedged using index hedges as an alternative to customised longevity hedges. As a consequence, when the hedger's population involves more than about 10,000 members over age 50, index longevity hedges (in conjunction with the other components of an ALM strategy) can provide an effective and lower cost alternative to both a full buy-out of pension liabilities or even to a strategy using customised longevity hedges