Long-Range Forecasts As Climate Adaptation: Experimental Evidence From Developing-Country Agriculture

Fiona Burlig, Amir Jina, Erin M. Kelley, Gregory V. Lane and Harshil Sahai

No 32173, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Climate change increases weather variability, preventing farmers from tailoring investments to the upcoming monsoon. In theory, accurate, seasonal forecasts overcome this challenge. We experimentally evaluate monsoon onset forecasts in India, randomizing 250 villages into control, forecast, and benchmark insurance groups. Forecast farmers update their beliefs and behavior: receiving “good news” relative to a farmer’s prior increases cultivation, farm inputs, farm profits (for those unaffected by flooding) and reduces business; receiving “bad news” reduces cultivated land and farm profits but increases business. Overall, forecasts raise a welfare index by 0.06 SD. Unlike insurance, forecasts reduce climate risk by enabling tailoring.

JEL-codes: D81 O12 O13 Q12 Q54 (search for similar items in EconPapers)
Date: 2024-02
New Economics Papers: this item is included in nep-agr, nep-env and nep-exp
Note: DEV EEE
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Citations: View citations in EconPapers (2)

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