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Climate Change, Risk and Grain Production in China

Author

Listed:
  • Rainer Holst

    (Georg-August-University Göttingen)

  • Xiaohua Yu

    (Georg-August-University Göttingen)

  • Carola Grün

    (Georg-August-University Göttingen)

Abstract

This paper employs the production function-based method proposed by Just and Pope (1978, 1979) to explicitly analyze production risk in the context of Chinese grain farming and climate change, and test for potential endogeneity of climate factors in Chinese grain production. Our results indicate that grain production in south China might, at least in the short run, could be a net beneficiary of global warming. In particular, we find that a 1 °C increase in annual average temperature in South China could entail an increase of grain output by 3.79 million tons or an economic benefit of around USD 798 million due to the increasing mean output. However the impact of global warming in north China is negative, small and insignificant. In addition, Hausman tests reveal no endogeneity of climate variables in Chinese grain production.

Suggested Citation

  • Rainer Holst & Xiaohua Yu & Carola Grün, 2011. "Climate Change, Risk and Grain Production in China," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 68, Courant Research Centre PEG.
  • Handle: RePEc:got:gotcrc:068
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    File URL: http://www2.vwl.wiso.uni-goettingen.de/courant-papers/CRC-PEG_DP_68.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. von Braun, Joachim, 2007. "The world food situation: New driving forces and required actions," Food policy reports 18, International Food Policy Research Institute (IFPRI).
    3. repec:reg:rpubli:291 is not listed on IDEAS
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    More about this item

    Keywords

    Agriculture; grain production; climate change; production risk; China;

    JEL classification:

    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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