MANAGING ENVIRONMENTAL RISK IN PRESENCE OF CLIMATE CHANGE: EVIDENCE FROM ETHIOPIA

Salvatore Di Falco and Marcella Veronesi

No 126010, 126th Seminar, June 27-29, 2012, Capri, Italy from European Association of Agricultural Economists

Abstract: This study investigates the impact of climate change adaptation on farm households’ downside risk exposure in the Nile Basin of Ethiopia. The analysis relies on a moment-based specification of the stochastic production function. We use an empirical strategy that accounts for the heterogeneity in the decision on whether to adapt or not, and for unobservable characteristics of farmers and their farm. We find that (i) past adaptation to climate change adaptation reduces current downside risk exposure, and so the risk of crop failure; (ii) climate change adaptation would have been more beneficial to the non-adapters if they adapted, in terms of reduction in downside risk exposure; and (iii) climate change adaptation is a successful risk management strategy that makes the adapters’ more resilient to climatic conditions.

Keywords: Environmental Economics and Policy; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 36
Date: 2012-06-20
New Economics Papers: this item is included in nep-afr, nep-agr and nep-env
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: On Adaptation to Climate Change and Risk Exposure in the Nile Basin of Ethiopia (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa126:126010

DOI: 10.22004/ag.econ.126010

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