Climate change perception and system of rice intensification (SRI) impact on dispersion and downside risk: a moment approximation approach

Mintewab Bezabih, Remidius Ruhinduka and Mare Sarr

No 256, GRI Working Papers from Grantham Research Institute on Climate Change and the Environment

Abstract: This article assesses the consequential risk impacts of the recent system of rice intensification (SRI) implemented in the Morogoro region of Tanzania, one of the largest Semi-Arid regions, using household and farm plot level data extended to incorporate farmers’ perceptions of climate change. The analysis implements a moment approximation approach that accounts for the impacts of the technology on the first three moments of rice yields and total household income. Using a endogenous switching regressions model, we find that perception of climate change is a key driver for SRI adoption and impacts primarily the moments of income. Furthermore, the average effect of SRI on dispersion and skewness are positive. In particular, the large increase in income variability is not compensated by the increase in skewness (i.e., a reduction in downside risk), which may explain why SRI adoption rate remains low in Tanzania. The study also highlights the importance of climate perceptions and moisture-conserving technology in risk management in Semi-Arid areas. The theme of the study also falls within the objectives of the PRISE project (Pathways to Resilience in Semi-Arid Economies) as it brings together institutional intervention (in the form of SRI provision), land productivity and vulnerability (in the form of farmers’ perceptions of climatic factors).

Date: 2016-11
New Economics Papers: this item is included in nep-agr and nep-env
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