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Designing innovating weather insurance for crop farmers


Term:

Summer

Department:

14: Economics

Faculty Supervisor:

Robert Townsend

Faculty email:

rtownsen@mit.edu

Apply by:

April 1, 2020

Contact:

Kamilya Tazhibayeva (kamilya@mit.edu)

Project Description

The goal of the project is to design affordable insurance for crop farmers that will provide accurate coverage against various weather shocks. In developing countries, farmers bear the financial burden of their crops’ exposure to weather ravages. This causes farmers to avoid investment in their crops. Instead, they stick with low-risk, low-yield cultivation practices and, as a result, forego much higher potential yields when weather is favorable. This UROP focuses on developing and implementing computationally a detailed algorithm (based on our current research) that will map weather realizations into optimal cultivation practices and yields. The RA will then use this algorithm to construct fair (in terms of predicted yield loss) insurance pricing schedules, assuming utility maximization by risk-averse farmers and profit maximization by the insurance provider. The RA will work with data from a multi-module panel household survey, local and regional weather stations, perform some data analysis, and generate synthetic weather data for alternative climate scenarios. The work is very computationally and data-intensive. It requires high attention to detail, responsible attitude, and excellent organizational and analytical skills. Expected hours are 40 per week. The candidate should be fully committed to the project. To apply, please email Kamilya Tazhibayeva (kamilya@mit.edu) your current resume and a short cover letter explaining your interest in the project and qualifications.

Pre-requisites

• Proficiency in R, Python, Matlab, or similar • Demonstrable previous experience of intensive computational/empirical work