The risk and consequences of multiple breadbasket failures: an integrated copula and multilayer agent-based modeling approach

Asjad Naqvi (), Franziska Gaupp () and Stefan Hochrainer-Stigler ()
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Franziska Gaupp: International Institute for Applied Systems Analysis (IIASA)
Stefan Hochrainer-Stigler: International Institute for Applied Systems Analysis (IIASA)

OR Spectrum: Quantitative Approaches in Management, 2020, vol. 42, issue 3, No 6, 727-754

Abstract: Abstract Climate shocks to food systems have been thoroughly researched in terms of food security and supply chain management. However, sparse research exists on the dependent nature of climate shocks on food-producing breadbasket regions and their subsequent cascading impacts. In this paper, we propose that a copula approach, combined with a multilayer network and an agent-based model, can give important insights on how tail-dependent shocks can impact food systems. We show how such shocks can potentially cascade within a region through the behavioral interactions of various layers. Based on our suggested framework, we set up a model for India and show that risks due to drought events multiply if tail dependencies during extremes drought is explicitly taken into account. We further demonstrate that the risk is exacerbated if displacement also takes place. In order to quantify the spatial–temporal evolution of climate risks, we introduce a new measure of multilayer vulnerability that we term Vulnerability Rank or VRank. We find that with higher food production losses, the number of agents that are affected increases nonlinearly due to cascading effects in different network layers. These effects spread to the unaffected regions via large-scale displacement causing sudden changes in production, employment and consumption decisions. Thus, demand shifts also force supply-side adjustments of food networks in the months following the climate shock. We suggest that our framework can provide a more accurate picture of food security-related systemic risks caused by multiple breadbasket failures which, in turn, can better inform risk management and humanitarian aid strategies.

Keywords: Multilayer networks; Agent-based models; Copulas; Breadbasket regions; Climate risks; Multiple breadbasket failures (MBBF); Systemic risk; Multilayer vulnerability (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s00291-020-00574-0

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