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WEATHER AT DIFFERENT GROWTH STAGES, MULTIPLE PRACTICES AND RISK EXPOSURES: PANEL DATA EVIDENCE FROM ETHIOPIA

Hailemariam Teklewold and Alemu Mekonnen ()
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Alemu Mekonnen: Department of Economics, Addis Ababa University, Ethiopia

Climate Change Economics (CCE), 2020, vol. 11, issue 02, 1-32

Abstract: This study investigates the effects of combinations of climate smart agricultural practices on risk exposure and cost of risk. We do this by examining the different risk components — mean, variance, skewness, and kurtosis — in a multinomial treatment effects framework by controlling weather variables for key stages of crop growth. We found that adoption of combinations of practices is widely viewed as a risk-reducing insurance strategy that can increase farmers’ resilience to production risk. The hypothesis of equality of weather parameters across crop development stages is also rejected. The heterogeneous effects of weather across crop growth stages have important implications for climate change adaptation to maximize quasi-option value. For a country that has the vision to build a climate-resilient economy, this knowledge is valuable to identify a combination of climate smart practices that minimizes production risk under variable weather conditions.

Keywords: Risk; weather; crop growth cycles; multiple practices; impact (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1142/S2010007820500098

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