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Climate Change, Risk and Grain Production in China

Rainer Holst, Xiaohua Yu () and Carola Grun

No 61177, 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado from Agricultural and Applied Economics Association

Abstract: This paper employs the production function-based method proposed by Just and Pope (1978, 1979) to explicitly analyze production risk in the context of Chinese grain farming and climate change, and test for a potential endogeneity of climate factors in Chinese grain production. Our results indicate that China might, at least in the short run, become a net beneficiary of climate change. In particular, we find that increases in annual average temperature increase mean output at the margin and at the same time lead to a reduction of production risk. Further calculations suggest that a 1 °C increase in annual average temperature would entail an economic benefit of $1.1 billion due to the increasing mean output. Furthermore, a Hausman test reveals no endogeneity of climate variables in Chinese grain production.

Keywords: Crop Production/Industries; Environmental Economics and Policy; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 29
Date: 2010
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https://ageconsearch.umn.edu/record/61177/files/Ra ... ion%20in%20China.pdf (application/pdf)

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Working Paper: Climate Change, Risk and Grain Production in China (2011) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea10:61177

DOI: 10.22004/ag.econ.61177

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