IDEAS home Printed from https://ideas.repec.org/p/ags/iaae15/211828.html
   My bibliography  Save this paper

Micro-Macro Impacts of Climate-Change on Agriculture and Food Markets

Author

Listed:
  • Kan, Iddo
  • Kimhi, Ayal
  • Kaminski, Jonathan

Abstract

This paper develops a structural econometric model of farmland allcoation that is linked to a market-level demand model. The farmland allocation model accounts for the presence of corner solutions in land-share decisions, which enables using disaggregated data for the estimation, and thereby allows treating prices as exogenous. Under partial equilibrium in the markets of vegetative products, the integrated model is then used to simulate the impacts of climate change on production, prices, agricultural profits and consimer surplus, making explicit the production responses of the micro units used for estimating the land-use model. We apply the method to Israeli data, and obtain negative projections of farm profits and consumer's surplus driven by climate change. Importantly, the effects of climate change on farm profits are significantly smaller compared with the case in which the price-feedback effects on agricultural supply are not accounted for.

Suggested Citation

  • Kan, Iddo & Kimhi, Ayal & Kaminski, Jonathan, 2015. "Micro-Macro Impacts of Climate-Change on Agriculture and Food Markets," 2015 Conference, August 9-14, 2015, Milan, Italy 211828, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae15:211828
    DOI: 10.22004/ag.econ.211828
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/211828/files/Kan-Micro-Macro%20Impacts%20of%20Climate-Change%20on%20Agriculture%20and%20Food%20Markets-212.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Douglas J. Miller & Andrew J. Plantinga, 1999. "Modeling Land Use Decisions with Aggregate Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 180-194.
    2. Cline, William R, 1996. "The Impact of Global Warming on Agriculture: Comment," American Economic Review, American Economic Association, vol. 86(5), pages 1309-1311, December.
    3. Kimhi, Ayal, 2010. "Does Rural Household Income Depend on Neighboring Communities? Evidence from Israel," Discussion Papers 93134, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    4. Kurukulasuriya, Pradeep & Mendelsohn, Robert, 2008. "Crop switching as a strategy for adapting to climate change," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 2(1), pages 1-22, March.
    5. Alain Carpentier & Elodie Letort, 2014. "Multicrop Production Models with Multinomial Logit Acreage Shares," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(4), pages 537-559, December.
    6. Richard E. Howitt, 1995. "Positive Mathematical Programming," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(2), pages 329-342.
    7. Sherman Robinson & Dirk Willenbockel & Kenneth Strzepek, 2012. "A Dynamic General Equilibrium Analysis of Adaptation to Climate Change in Ethiopia," Review of Development Economics, Wiley Blackwell, vol. 16(3), pages 489-502, August.
    8. Michetti, Melania, 2012. "Modelling Land Use, Land-Use Change, and Forestry in Climate Change: A Review of Major Approaches," Climate Change and Sustainable Development 130546, Fondazione Eni Enrico Mattei (FEEM).
    9. Mendelsohn, Robert & Nordhaus, William D & Shaw, Daigee, 1994. "The Impact of Global Warming on Agriculture: A Ricardian Analysis," American Economic Review, American Economic Association, vol. 84(4), pages 753-771, September.
    10. Channing Arndt & Paul Chinowsky & Sherman Robinson & Kenneth Strzepek & Finn Tarp & James Thurlow, 2012. "Economic Development under Climate Change," Review of Development Economics, Wiley Blackwell, vol. 16(3), pages 369-377, August.
    11. Olivier Deschênes & Michael Greenstone, 2007. "The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather," American Economic Review, American Economic Association, vol. 97(1), pages 354-385, March.
    12. Jonathan Kaminski & Iddo Kan & Aliza Fleischer, 2013. "A Structural Land-Use Analysis of Agricultural Adaptation to Climate Change: A Proactive Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(1), pages 70-93.
    13. Seo, S. Niggol & Mendelsohn, Robert, 2008. "An analysis of crop choice: Adapting to climate change in South American farms," Ecological Economics, Elsevier, vol. 67(1), pages 109-116, August.
    14. Ian W. Hardie & Peter J. Parks, 1997. "Land Use with Heterogeneous Land Quality: An Application of an Area Base Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 299-310.
    15. Arndt, Channing & Strzepeck, Kenneth & Tarp, Finn & Thurlow, James & Fant, Charles & Wright, Len, 2010. "Adapting to Climate Change An Integrated Biophysical and Economic Assessment for Mozambique," WIDER Working Paper Series 101, World Institute for Development Economic Research (UNU-WIDER).
    16. JunJie Wu & Kathleen Segerson, 1995. "The Impact of Policies and Land Characteristics on Potential Groundwater Pollution in Wisconsin," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(4), pages 1033-1047.
    17. Miller, Douglas & Plantinga, Andrew J., 1999. "Modeling Land Use Decisions with Aggregate Data," Staff General Research Papers Archive 1487, Iowa State University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kan, Iddo & Kimhi, Ayal & Kaminski, Jonathan, 2015. "Climate-Change Impacts on Agriculture and Food Markets: Combining a Micro-Level Structural Land-Use Model and a Market-Level Equilibrium Model," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205128, Agricultural and Applied Economics Association.
    2. Kimhi, A., 2018. "Integrated Micro-Macro Structural Econometric Framework for Assessing Climate-Change Impacts on Agricultural Production and Food Markets," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 276972, International Association of Agricultural Economists.
    3. Kan, Iddo & Reznik, Ami & Kimhi, Ayal & Kaminski, Jonathan, 2018. "The Impacts of Climate Change on Cropland Allocation, Crop Production, Output Prices and Social Welfare in Israel: A Structural Econometric Framework," Discussion Papers 290059, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    4. Kan, Iddo & Kimhi, Ayal & Kaminski, Jonathan, 2014. "The impact of climate change on agriculture and food prices: combining a micro land use model and a market equilibrium model," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 183024, European Association of Agricultural Economists.
    5. Jonathan Kaminski & Iddo Kan & Aliza Fleischer, 2013. "A Structural Land-Use Analysis of Agricultural Adaptation to Climate Change: A Proactive Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(1), pages 70-93.
    6. Alain CARPENTIER & Alexandre GOHIN & Paolo SCKOKAI & Alban THOMAS, 2015. "Economic modelling of agricultural production:past advances and new challenges," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 96(1), pages 131-166.
    7. Lungarska, Anna & Chakir, Raja, 2018. "Climate-induced Land Use Change in France: Impacts of Agricultural Adaptation and Climate Change Mitigation," Ecological Economics, Elsevier, vol. 147(C), pages 134-154.
    8. Ji, Xinde & Cobourn, Kelly M., 2017. "Water Availability, Land Allocation, and the Role of Irrigation Districts under Prior Appropriation Doctrine," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258377, Agricultural and Applied Economics Association.
    9. Xinde Ji & Kelly M. Cobourn, 2018. "The Economic Benefits of Irrigation Districts under Prior Appropriation Doctrine: An Econometric Analysis of Agricultural Land‐Allocation Decisions," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(3), pages 441-467, September.
    10. Alain Carpentier & Elodie Letort, 2014. "Multicrop Production Models with Multinomial Logit Acreage Shares," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(4), pages 537-559, December.
    11. Chakir, Raja & Lungarska, Anna, 2015. "Agricultural land rents in land use models: a spatial econometric analysis," 150th Seminar, October 22-23, 2015, Edinburgh, Scotland 212641, European Association of Agricultural Economists.
    12. Hyunseok Kim & GianCarlo Moschini, 2018. "The Dynamics of Supply: U.S. Corn and Soybeans in the Biofuel Era," Center for Agricultural and Rural Development (CARD) Publications 18-wp579, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    13. Moniruzzaman, Shaikh, 2015. "Crop choice as climate change adaptation: Evidence from Bangladesh," Ecological Economics, Elsevier, vol. 118(C), pages 90-98.
    14. Cobourn, Kelly M. & Ji, Xinde & Mooney, Sian & Crescenti, Neil, 2017. "Water right seniority, economic efficiency and land allocation decisions," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258271, Agricultural and Applied Economics Association.
    15. BEN ZAIED, YOUNES & Zouabi, Oussama, 2015. "Climate change impacts on agriculture: A panel cointegration approach and application to Tunisia," MPRA Paper 64711, University Library of Munich, Germany.
    16. Cui, Xiaomeng, 2020. "Climate change and adaptation in agriculture: Evidence from US cropping patterns," Journal of Environmental Economics and Management, Elsevier, vol. 101(C).
    17. Arisha Ashraf & Ariel Dinar & Érika Monteiro & Todd Gaston, 2016. "Adaptation In California Agriculture: What Have We Been Assessing For Two And A Half Decades?," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 7(02), pages 1-19, May.
    18. Eric Njuki & Boris E Bravo-Ureta & Víctor E Cabrera, 2020. "Climatic effects and total factor productivity: econometric evidence for Wisconsin dairy farms," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 47(3), pages 1276-1301.
    19. Murray, Anthony G & Mills, Bradford F, 2014. "Estimating the Resiliency of Zambian Smallholder Farmers: Evidence from a Three-Wave Panel," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170234, Agricultural and Applied Economics Association.
    20. Xinde Ji & Kelly M. Cobourn, 2021. "Weather Fluctuations, Expectation Formation, and Short-Run Behavioral Responses to Climate Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(1), pages 77-119, January.

    More about this item

    Keywords

    Agricultural and Food Policy; Environmental Economics and Policy; Food Consumption/Nutrition/Food Safety;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iaae15:211828. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.