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Value Of Improved Long-Range Weather Information

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  • Richard M. Adams
  • Kelly J. Bryant
  • Bruce A. Mccarl
  • David M. Legler
  • James O'Brien
  • Andrew Solow
  • Rodney Weiher

Abstract

An important human welfare implication of climate involves effects of interannual variation in temperature and precipitation on agriculture. Year-to-year variations in U.S. climate result from El Niño-Southern Oscillation (ENSO), a quasi-periodic redistribution of heat and momentum in the tropical Pacific Ocean. The study described here represents a preliminary assessment of the value to the entire U.S. agricultural sector of improved ENSO forecasts in the southeastern United States. This interdisciplinary assessment combines data and models from meteorology, plant sciences, and economics under a value of information framework based on Bayesian decision theory. An economic model of the U.S. agricultural sector uses changes in yields for various ENSO phases to translate physical (yield) effects of ENSO changes into economic effects on producers and on domestic and foreign consumers. The value of perfect information to agriculture is approximately $145 million. The economic value of an imperfect forecast is $96 million. These results suggest that increases in forecast accuracy have substantial economic value to agriculture. Copyright 1995 Western Economic Association International.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Contemporary Economic Policy.

Volume (Year): 13 (1995)
Issue (Month): 3 (07)
Pages: 10-19

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Handle: RePEc:bla:coecpo:v:13:y:1995:i:3:p:10-19

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Cited by:
  1. Allan D. Brunner, 1998. "El Nino and world primary commodity prices: warm water or hot air?," International Finance Discussion Papers, Board of Governors of the Federal Reserve System (U.S.) 608, Board of Governors of the Federal Reserve System (U.S.).
  2. Haq, Rashida & Shafique, Saima, 2009. "Impact of water management on agricultural production," MPRA Paper 38969, University Library of Munich, Germany.
  3. Fernandez, Mario Andres, 2013. "Decadal Climate Variability: Economic Implications In Agriculture And Water In The Missouri River Basin," 2013 Conference, August 28-30, 2013, Christchurch, New Zealand, New Zealand Agricultural and Resource Economics Society 160199, New Zealand Agricultural and Resource Economics Society.
  4. Ferris, John N., 1999. "An Analysis Of The Impact Of Enso (El Nino/Southern Oscillation) On Global Crop Yields," 1999 Annual meeting, August 8-11, Nashville, TN, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 21517, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. Attwood, J. D. & McCarl, B. & Chen, Chi-Chung & Eddleman, B. R. & Nayda, B. & Srinivasan, R., 2000. "Assessing regional impacts of change: linking economic and environmental models," Agricultural Systems, Elsevier, Elsevier, vol. 63(3), pages 147-159, March.
  6. Louis Eeckhoudt & Alban Thomas & Nicolas Treich, 2011. "Correlated risks and the value of information," Journal of Economics, Springer, Springer, vol. 102(1), pages 77-87, January.
  7. Meza, Francisco J. & Wilks, Daniel S., 2004. "Use of seasonal forecasts of sea surface temperature anomalies for potato fertilization management. Theoretical study considering EPIC model results at Valdivia, Chile," Agricultural Systems, Elsevier, Elsevier, vol. 82(2), pages 161-180, November.
  8. Thanarak Laosuthi & David D. Selover, 2007. "Does El Nino Affect Business Cycles," Eastern Economic Journal, Eastern Economic Association, vol. 33(1), pages 21-42, Winter.
  9. Mjelde, J. W. & Hill, H. S. J., 1999. "The effect of the use of improved climate forecasts on variable costs, input usage, and production," Agricultural Systems, Elsevier, Elsevier, vol. 60(3), pages 213-225, June.
  10. Ariaster Baumgratz Chimeli & Francisco de Assis de Souza Filho, 2004. "Climate Forecasting And Emergency Policies Evidence Of Opportunities From Ceará, Brazil," Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32th Brazilian Economics Meeting], ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of G 118, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  11. Haight, Robert G. & Polasky, Stephen, 2010. "Optimal control of an invasive species with imperfect information about the level of infestation," Resource and Energy Economics, Elsevier, Elsevier, vol. 32(4), pages 519-533, November.
  12. B. Sonneveld & M. Keyzer & P. Adegbola & S. Pande, 2012. "The Impact of Climate Change on Crop Production in West Africa: An Assessment for the Oueme River Basin in Benin," Water Resources Management, Springer, Springer, vol. 26(2), pages 553-579, January.
  13. Sedjo, Roger & Bergeron, Nancy, 1999. "The Impact of El Niño on Northeastern Forests: A Case Study on Maple Syrup Production," Discussion Papers, Resources For the Future dp-99-43, Resources For the Future.
  14. Macauley, Molly, 2005. "The Value of Information: A Background Paper on Measuring the Contribution of Space-Derived Earth Science Data to National Resource Management," Discussion Papers, Resources For the Future dp-05-26, Resources For the Future.
  15. Macauley, Molly, 2006. "Ascribing Societal Benefit to Environmental Observations of the Earth from Space: The Multi-angle Imaging Spectroradiometer (MISR)," Discussion Papers, Resources For the Future dp-06-09, Resources For the Future.
  16. Francesco Bosello & Jian Zhang, 2006. "The Effects of Climate Change on Agriculture," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, Associazione Rossi Doria, issue 1, March.
  17. Hill, Harvey S.J. & Park, Jaehong & Mjelde, James W. & Rosenthal, Wesley & Love, H. Alan & Fuller, Stephen W., 1998. "The Value Of El Nino Forecast Methods For The U.S. Winter Wheat Producers, Do They Differ?," 1998 Annual meeting, August 2-5, Salt Lake City, UT, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 20906, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  18. EECKHOUDT Louis & THOMAS Alban & TREICH Nicolas, 2006. "Correlated Risks and the Value of Information for Agricultural Producers," LERNA Working Papers, LERNA, University of Toulouse 06.12.205, LERNA, University of Toulouse.
  19. Lybbert, Travis J. & Magnan, Nicholas & Gubler, W. Douglas, 2012. "Multi-Dimensional Responses to Risk Information: How do Winegrape Growers Respond to Disease Forecasts and to What Environmental Effect?," Working Papers, Robert Mondavi Institute Center for Wine Economics 162521, Robert Mondavi Institute Center for Wine Economics.

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