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International Ricardian Studies. Marginal impacts of Temperature and Precipitation.

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Presentation on theme: "International Ricardian Studies. Marginal impacts of Temperature and Precipitation."— Presentation transcript:

1 International Ricardian Studies

2 Marginal impacts of Temperature and Precipitation

3 African Crop Study No land value No wages for own labor No reliable county data Had to collect new data Sampled farmers in 11 countries Focused on net revenue per hectare

4 CountryDrylandIrrigatedTotal Burkina Faso 990 41 1031 Cameroon 646 105 751 Egypt 0 802 Ethiopia 874 66 940 Ghana 849 29 878 Kenya 675 79 754 Niger 849 48 897 Senegal1037 31 1068 South Africa 199 87 286 Zambia 956 14 970 Zimbabwe 597 90 687 Total76721392 9064

5 VariableAll FarmsDrylandIrrigated Winter temperature-173.6**-106.7-93.5 Winter temperature squared6.1**3.9*4.9 Spring temperature115.1-82.858.7 Spring temperature squared-5.0**-0.3-4.1 Summer temperature173.9**198.6**827.5** Summer temperature squared-1.9-3.2*-13.1* Fall temperature-98.1-92.4-824.2* Fall temperature squared1.11.515.3*

6 Winter precipitation-2.9*-1.95.8 Winter precipitation squared0.0**0.00 Spring precipitation3.5*3.6**-10.6 Spring precipitation squared-0.001-0.011*0.091* Summer precipitation3.4**1.9*21.4** Summer precipitation squared-0.012**-0.005-0.086** Fall precipitation-0.5-0.6-14.7** Fall precipitation squared0.0055*0.0053* 0.0586** *

7 Mean Flow9.4**-5.48.8** Farm area-0.1**-0.3**-0.0** Farm area squared0.0*0.0**0.0* Elevation0.035-0.00090.229 Log(household size)22.910.162.4 Irrigate(1/0)237.5** Electricity (1/0)66.6**47.7**233.2*

8 West Africa Dummy136**208**-285 North Africa Dummy457**675* East Africa Dummy-186**-154**-361 Heavy Machinery Dummy51.8**55.5**-60.8 Animal Power Dummy10.449.3**-185.5** Constant-3881081-549 N845972381221 R20.40.20.3

9 Marginal Impact Africa Regression Irrigated Regression Dryland Regression Temperature -28.3** (-1.3) 33.6 (0.5) -23.0** (-1.6) Precipitation 2.65** (0.36) 2.08 (0.06) 2.02** (0.47)

10 Marginal impacts of Temperature and Precipitation

11 Climate Impacts PCM 2100 CCSR 2100 CCC 2100 Dryland ΔNet Revenue (USD/ha) +160.6 (50.8%) -116.6 (-36%) -137.4 (-43%) Irrigated ΔNet Revenue (USD/ha) +352.0 (30%) -416.6 (-36%) +341.4 (29%) All Farms ΔNet Revenue (USD/ha) +212.5 (48%) -46.3 (-10%) -143.7 (-33%)

12 African Livestock No data on farm value No data on land used Estimated net revenue per farm Estimated livestock owned per farm and then net revenue per livestock owned

13 Net revenue per farm Value of livestock owned Net revenue per livestock value in US$ 1000 VariableCoef.T-stat.Coef.T-stat.Coef.T-stat. Temperature * small 1 -1260.-3.27-1049.-1.71-49.9-2.53 Temperature sq * small 1 29.63.5128.22.100.551.28 Precipitation * small 1 -46.6-2.14-103.-2.98-13.41-12.05 Precipitation sq * small 1 0.201.790.472.600.0713.17 Temperature * large 1 - 323.7-0.821351.7.1514.902.43 Temperature sq * large 1 -0.23-0.03-42.8-7.21-0.50-2.59 Precipitation * large 1 -99.0-4.51-7.62-0.20-2.67-2.19 Precipitation sq * large 1 0.282.26-0.32-1.470.011.07

14 Log household size-1024.-3.31-2240.-4.5510.570.66 Electricity dummy2469.5.644960.7.13219.59.72 Population density79.12.75126.62.7711.557.96 Population density sq-1.16-3.65-2.13-4.21-0.12-7.79 % Muslim-2640.-2.81-4508.-3.02-31.75-0.75 % Grassland9799.7.1822952.10.58 Adj Rsq0.20 N4763

15 TYPES Current livestock income ($/farm) Marginal temperature impact ($/C˚) Marginal precipitation impact ($/mm) Temperature elasticity Precipitation elasticity Net revenue per farm SMALL 105108.8*-19.6*24.0*-12.5* LARGE 3291-334.2-64.7*-2.30-1.20* Value of livestock owned SMALL 259256.8*-41.0*22.9*-10.6* LARGE 7795-357.9*-93.0-1.04*-0.73 Net revenue per livestock value SMALL 0.371-0.024*-0.004*-1.51*-0.63* LARGE 0.394-0.033*-0.006*-1.87*-0.94*

16 AGGREGATE IMPACT Impact per small farm ($/farm) % of livestock income Impact per large farm ($/farm) % of livestock income 2100 CCC+2034.56+322.9%-830.62-26.4% CCSR+1391.33+220.8%+142.55+4.5% PCM+337.59+53.6%-720.25-22.9%

17 Results Ricardian analysis reveals climate is important to African crops and livestock Warming is likely to be harmful to African crops and can be harmful to livestock Increased precipitation is generally beneficial to African agriculture Impacts can be immediate to countries that are currently hot and/or dry


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