The Impact of Climate Change on Agriculture: Nonlinear Effects and Aggregation Bias in Ricardian Models of Farm Land Values

Carlo Fezzi and Ian Bateman

No 162377, Climate Change and Sustainable Development from Fondazione Eni Enrico Mattei (FEEM)

Abstract: Ricardian (hedonic) analyses of the impact of climate change on farmland values typically assume additively separable effects of temperature and precipitation. Model estimation is implemented on data aggregated across counties or large regions. We investigate the potential bias induced by such approaches by using a large panel of farm-level data. Consistent with the literature on plant physiology, we observe significant non-linear interaction effects, with more abundant precipitation acting as a mitigating factor for increased heat stress. This interaction disappears when the same data is aggregated in the conventional manner, leading to predictions of climate change impacts which are significantly distorted.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 46
Date: 2013-11
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Citations: View citations in EconPapers (2)

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https://ageconsearch.umn.edu/record/162377/files/NDL2013-094.pdf (application/pdf)

Related works:
Journal Article: The Impact of Climate Change on Agriculture: Nonlinear Effects and Aggregation Bias in Ricardian Models of Farmland Values (2015)
Working Paper: The Impact of Climate Change on Agriculture: Nonlinear Effects and Aggregation Bias in Ricardian Models of Farm Land Values (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemcl:162377

DOI: 10.22004/ag.econ.162377

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