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The welfare effects of crop biodiversity as an adaptation to climate shocks in Kenya

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  • Bozzola, Martina
  • Smale, Melinda

Abstract

This paper investigates the effects of crop biodiversity on farm income and production risk using a large panel dataset of rural households in Kenya. We consider three different metrics of in situ (on-farm) crop diversification (richness, evenness and concentration). We apply a partial moments-based model to test the effects of each strategy on welfare defined as expected crop income, variability (variance) and downside risk (skewness). Our comprehensive econometric approach differentiates climatic shocks, weather and climate change. The results suggest that the benefits from greater diversification in terms of enhanced land productivity and lower production costs could surpass the foregone benefit from greater efficiency associated with more concentrated production systems. Crop richness and evenness each reduce exposure to crop income risk, especially for more vulnerable farmers who produce below the expected revenue threshold. Farmers who rely on greater crop specialization, on the contrary, are more exposed to crop income risk.

Suggested Citation

  • Bozzola, Martina & Smale, Melinda, 2020. "The welfare effects of crop biodiversity as an adaptation to climate shocks in Kenya," World Development, Elsevier, vol. 135(C).
    • Handle: RePEc:eee:wdevel:v:135:y:2020:i:c:s0305750x20301911
    DOI: 10.1016/j.worlddev.2020.105065
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    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • 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
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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