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The Impact of Global Warming on U.S. Agriculture: An Econometric Analysis of Optimal Growing Conditions

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  • Schlenker, Wolfram
  • Hanemann, W. Michael
  • Fisher, Anthony C.

Abstract

We link farmland values to climatic, soil, and socioeconomic variables for counties east of the 100th meridian, the historic boundary of agriculture not primarily dependent on irrigation. Degree days, a non-linear transformation of the climatic variables suggested by agronomic experiments as more relevant to crop yield gives an improved fit and increased robustness. Estimated coefficients are consistent with the experimental results. The model is employed to estimate the potential impacts on farmland values for a range of recent warming scenarios. The predictions are very robust and more than 75% of the counties in our sample show a statistically significant effect, ranging from moderate gains to large losses, with losses in the aggregate that can become quite large under scenarios involving sustained heavy use of fossil fuels.

Suggested Citation

  • Schlenker, Wolfram & Hanemann, W. Michael & Fisher, Anthony C., 2004. "The Impact of Global Warming on U.S. Agriculture: An Econometric Analysis of Optimal Growing Conditions," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt0801j7s0, Department of Agricultural & Resource Economics, UC Berkeley.
    • Handle: RePEc:cdl:agrebk:qt0801j7s0
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    References listed on IDEAS

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    1. Davidson, Russell & MacKinnon, James G, 1981. "Several Tests for Model Specification in the Presence of Alternative Hypotheses," Econometrica, Econometric Society, vol. 49(3), pages 781-793, May.
    2. Nordhaus, William D, 1991. "To Slow or Not to Slow: The Economics of the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 920-937, July.
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    5. Wolfram Schlenker & W. Michael Hanemann & Anthony C. Fisher, 2005. "Will U.S. Agriculture Really Benefit from Global Warming? Accounting for Irrigation in the Hedonic Approach," American Economic Review, American Economic Association, vol. 95(1), pages 395-406, March.
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    Cited by:

    1. Schlenker, Wolfram & Hanemann, W Michael & Fisher, Anthony C, 2007. "Water Availability, Degree Days, and the Potential Impact of Climate Change on Irrigated Agriculture in California," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt8q8309qn, Department of Agricultural & Resource Economics, UC Berkeley.
    2. Schlenker, Wolfram & Hanemann, W. Michael & Fisher, Anthony C., 2004. "Will U.S. Agriculture Really Benefit from Global Warming? Accounting for Irrigation in the Hedonic Approach," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt65s781bh, Department of Agricultural & Resource Economics, UC Berkeley.
    3. Wolfram Schlenker & W. Michael Hanemann & Anthony C. Fisher, 2005. "Will U.S. Agriculture Really Benefit from Global Warming? Accounting for Irrigation in the Hedonic Approach," American Economic Review, American Economic Association, vol. 95(1), pages 395-406, March.
    4. Boussios, David & Barkley, Andrew P., 2012. "Kansas Grain Supply Response to Economic and Biophysical Factors, 1977-2007," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124385, Agricultural and Applied Economics Association.
    5. John Horowitz, 2009. "The Income–Temperature Relationship in a Cross-Section of Countries and its Implications for Predicting the Effects of Global Warming," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 44(4), pages 475-493, December.
    6. Kelly, David L. & Kolstad, Charles D. & Mitchell, Glenn T., 2005. "Adjustment costs from environmental change," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 468-495, November.

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    Keywords

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    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • 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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