Desert Dust Storms: Insurability and Financial Solutions

79 Pages Posted: 16 Sep 2024

See all articles by Andreas Milidonis

Andreas Milidonis

University of Cyprus - Department of Accounting and Finance

Marina Solomou

University of Cyprus

Panayiotis Kouis

University of Cyprus - Medical School

Petros Mouzourides

Department of Civil and Environmental Engineering, Faculty of Engineering, University of Cyprus

Marina Neophytou

University of Cyprus

Date Written: August 14, 2024

Abstract

Desert Dust Storms (DDS) constitute natural hazards around the globe, with about half originating from the Sahara desert. Starting from a commonly accepted DDS definition, we use data from rural-background (RB) air-quality monitoring stations, which are away from anthropogenic influence, to identify DDS. Focusing on a representative sample of RB stations from Southern Europe (Cyprus and Italy), we document that P M 10 concentrations exceeding the 80th percentile of the P M 10 distribution per station, correlate with a 2.5% to 5.5% increase in daily deaths across all stations. In Southeastern Europe, where DDS days are more severe, daily deaths increase by nearly 20% at the 99.5th percentile of the P M 10 distribution. Hospital admissions in Southeastern Europe also rise by about 6.5% on DDS days. We argue that the nature of DDS satisfies common insurability conditions. Hence, to mitigate costs associated with DDS exposure, we propose and price insurance and financial instruments.

Keywords: Desert Dust Storms, Air Pollution, Insurance, Weather Derivatives JEL Classification: G22

JEL Classification: G22, G23, G38, Q53, Q58

Suggested Citation

Milidonis, Andreas and Solomou, Marina and Kouis, Panayiotis and Mouzourides, Petros and Neophytou, Marina, Desert Dust Storms: Insurability and Financial Solutions (August 14, 2024). Available at SSRN: https://ssrn.com/abstract=4925797 or http://dx.doi.org/10.2139/ssrn.4925797

Andreas Milidonis (Contact Author)

University of Cyprus - Department of Accounting and Finance ( email )

P.O. Box 20537
Nicosia CY-1678
Cyprus
+357 22 893 626 (Phone)

HOME PAGE: http://www.ucy.ac.cy/~amilidon/

Marina Solomou

University of Cyprus ( email )

Panayiotis Kouis

University of Cyprus - Medical School ( email )

Petros Mouzourides

Department of Civil and Environmental Engineering, Faculty of Engineering, University of Cyprus

Cyprus

HOME PAGE: http://https://www.ucy.ac.cy/cee/

Marina Neophytou

University of Cyprus ( email )

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