Inter-Decadal Climate Variability in the Edwards Aquifer: Regional Impacts of DCV on Crop Yields and Water Use

Jinxiu Ding and Bruce McCarl

No 170216, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: Agricultural production and water resources are sensitive to climate variability and change. Decadal climate variability (DCV) phenomena are in the early stages of being explored. This paper investigates the economic value of DCV information in the Edwards Aquifer region of Texas as well as possible adaptation to that information. To do this we first do an econometric estimate of the impacts of DCV phase combinations on crop yields in the EA region, then we alter regional model to include DCV information. We find that the average economic value of perfect DCV information forecast is $40.76 million per year. And for a less perfect forecast in terms of knowing DCV information under transition probability, the average economic value is around $1.52 million per year.

Keywords: Crop Production/Industries; Environmental Economics and Policy; Productivity Analysis; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 40
Date: 2014
New Economics Papers: this item is included in nep-agr and nep-env
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:170216

DOI: 10.22004/ag.econ.170216

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