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How do smallholder farmers adapt to water scarcity? Evidence from the three Gorges Dam

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  • Chen, Ting
  • Liu, Chong
  • Ma, Sen

Abstract

Using the initial impoundment of the world’s largest hydroelectric dam as a natural experiment, we assess how farming households adapt to dam-induced seasonal water scarcity. We find that the impoundment of the TGD for power generation has altered the Yangtze River’s water cycle, seasonally reducing downstream water supply and causing rice yields to fall. In response to a persistent 12% decline in yields, subsistence households primarily expanded their farming area to maintain total output. While some households reallocated labor to non-agricultural sectors, this adaptation was significantly constrained by wealth endowment.

Suggested Citation

  • Chen, Ting & Liu, Chong & Ma, Sen, 2026. "How do smallholder farmers adapt to water scarcity? Evidence from the three Gorges Dam," Journal of Environmental Economics and Management, Elsevier, vol. 139(C).
    • Handle: RePEc:eee:jeeman:v:139:y:2026:i:c:s009506962600077x
    DOI: 10.1016/j.jeem.2026.103357
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    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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