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The Economic Impacts of Climate Change Evidence from Agricultural Profits and Random Fluctuations in Weather

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  • Olivier Deschenes
  • Michael Greenstone

Abstract

We thank the late David Bradford for initiating a conversation that motivated this paper. Our admiration for David’s brilliance as an economist was only exceeded by our admiration for him as a human being. We are grateful for the especially valuable criticisms from David Card and two anonymous referees. Hoyt Bleakley, Tim Conley, Tony Fisher, Michael Hanemann, Enrico Moretti, Marc Nerlove, and Wolfram Schlenker provided insightful comments. We are also grateful for comments from seminar participants at Maryland, Princeton, Yale, the NBER Environmental Economics Summer Institute, and the “Conference on Spatial and Social Interactions in Economics” at the University of California-Santa Barbara. Anand Dash, Elizabeth Greenwood, Barrett Kirwan, Nick Nagle, and William Young, provided outstanding research assistance. We are indebted to Shawn Bucholtz at the United States Department of Agriculture for generously generating weather data for this analysis from the Parameterelevation Regressions on Independent Slopes Model. Finally, we acknowledge The Vegetation/Ecosystem Modeling and Analysis Project and the Atmosphere Section, National Center for Atmospheric Research for access to the Transient Climate database, which we used to obtain regional climate change predictions. Greenstone acknowledges generous funding from the American Bar Foundation.

Suggested Citation

  • Olivier Deschenes & Michael Greenstone, 2006. "The Economic Impacts of Climate Change Evidence from Agricultural Profits and Random Fluctuations in Weather," Working Papers 0601, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
  • Handle: RePEc:mee:wpaper:0601
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    Cited by:

    1. Bluedorn, John & Valentinyi, Akos & Vlassopoulos, Michael, 2009. "The Long-Lived Effects of Historic Climate on the Wealth of Nations," CEPR Discussion Papers 7572, C.E.P.R. Discussion Papers.
    2. Zeynep K. Hansen & Gary D. Libecap & Scott E. Lowe, 2011. "Climate Variability and Water Infrastructure: Historical Experience in the Western United States," NBER Chapters,in: The Economics of Climate Change: Adaptations Past and Present, pages 253-280 National Bureau of Economic Research, Inc.
    3. B. Sonneveld & M. Keyzer & P. Adegbola & S. Pande, 2012. "The Impact of Climate Change on Crop Production in West Africa: An Assessment for the Oueme River Basin in Benin," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(2), pages 553-579, January.
    4. Jonathan F. Fox & Price V. Fishback & Paul W. Rhode, 2011. "The Effects of Weather Shocks on Crop Prices in Unfettered Markets: The United States Prior to the Farm Programs, 1895-1932," NBER Chapters,in: The Economics of Climate Change: Adaptations Past and Present, pages 99-130 National Bureau of Economic Research, Inc.
    5. Orley C. Ashenfelter & Karl Storchmann, 2006. "Using a Hedonic Model of Solar Radiation to Assess the Economic Effect of Climate Change: The Case of Mosel Valley Vineyards," Working Papers 72, Princeton University, Department of Economics, Center for Economic Policy Studies..
    6. Olivier Deschenes & Charles Kolstad, 2011. "Economic impacts of climate change on California agriculture," Climatic Change, Springer, vol. 109(1), pages 365-386, December.
    7. Alan I. Barreca, 2010. "The Long-Term Economic Impact of In Utero and Postnatal Exposure to Malaria," Journal of Human Resources, University of Wisconsin Press, pages 865-892.
    8. Mukherjee, Monobina & Schwabe, Kurt A., 2014. "Where's the salt? A spatial hedonic analysis of the value of groundwater to irrigated agriculture," Agricultural Water Management, Elsevier, vol. 145(C), pages 110-122.
    9. Asadoorian, Malcolm O. & Eckaus, Richard S. & Schlosser, C. Adam, 2008. "Modeling climate feedbacks to electricity demand: The case of China," Energy Economics, Elsevier, vol. 30(4), pages 1577-1602, July.
    10. Barrios, Salvador & Ouattara, Bazoumana & Strobl, Eric, 2008. "The impact of climatic change on agricultural production: Is it different for Africa?," Food Policy, Elsevier, vol. 33(4), pages 287-298, August.
    11. Michael Greenstone & Justin Gallagher, 2008. "Does Hazardous Waste Matter? Evidence from the Housing Market and the Superfund Program," The Quarterly Journal of Economics, Oxford University Press, vol. 123(3), pages 951-1003.
    12. Martinsohn, Maria & Hansen, Heiko, 2012. "The Impact of Climate Change on the Economics of Dairy Farming – a Review and Evaluation," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 61(2).
    13. Joelle SAAD-LESSLER & George TSELIOUDIS, 2010. "Storms, Climate Change, And The Us Economy: A National Analysis," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 10(1).
    14. Kahrl, Fredrich & Roland-Holst, David, 2008. "Climate change risk and response," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt79x4k2qd, Department of Agricultural & Resource Economics, UC Berkeley.
    15. Kenneth Y. Chay & Michael Greenstone, 2005. "Does Air Quality Matter? Evidence from the Housing Market," Journal of Political Economy, University of Chicago Press, vol. 113(2), pages 376-424, April.
    16. Joelle SAAD-LESSLER & George TSELIOUDES, 2009. "Storms, Climate Change, and the US Economy: A National Analysis," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 9(1).
    17. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2008. "Climate Change and Economic Growth: Evidence from the Last Half Century," NBER Working Papers 14132, National Bureau of Economic Research, Inc.
    18. Wolfram Schlenker & Michael J. Roberts, 2008. "Estimating the Impact of Climate Change on Crop Yields: The Importance of Nonlinear Temperature Effects," NBER Working Papers 13799, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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