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Distributional Implications of Climate Change in Rural India: A General Equilibrium Approach

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  • Hanan G. Jacoby
  • Mariano Rabassa
  • Emmanuel Skoufias

Abstract

We develop a general equilibrium framework, based on a specific-factors trade model, to quantify the medium-term household welfare impacts of global warming in rural India. Using an hedonic approach grounded in the theory combined with detailed microdata, we estimate that three decades of warming will reduce agricultural productivity in the range of 7%–13%, with the arid northwest of India especially hard hit. Our analysis shows that the proportional welfare cost of climate change is likely to be both modest and evenly distributed across percentiles of the per capita income distribution, but this latter conclusion emerges only when the flexibility of rural wages is taken into account.

Suggested Citation

  • Hanan G. Jacoby & Mariano Rabassa & Emmanuel Skoufias, 2015. "Distributional Implications of Climate Change in Rural India: A General Equilibrium Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(4), pages 1135-1156.
    • Handle: RePEc:oup:ajagec:v:97:y:2015:i:4:p:1135-1156.
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    File URL: http://hdl.handle.net/10.1093/ajae/aau084
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    Cited by:

    1. Eshita Gupta & Bharat Ramaswami & E. Somanathan, 2021. "The Distributional Impact of Climate Change: Why Food Prices Matter," Economics of Disasters and Climate Change, Springer, vol. 5(2), pages 249-275, July.
    2. Melnikov, Nikolai B. & O’Neill, Brian C. & Dalton, Michael G. & van Ruijven, Bas J., 2017. "Downscaling heterogeneous household outcomes in dynamic CGE models for energy-economic analysis," Energy Economics, Elsevier, vol. 65(C), pages 87-97.
    3. Dang, Hai-Anh H. & Cong Nguyen, Minh & Trinh, Trong-Anh, 2023. "Does hotter temperature increase poverty and inequality? Global evidence from subnational data analysis," LSE Research Online Documents on Economics 120156, London School of Economics and Political Science, LSE Library.

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