IDEAS home Printed from https://ideas.repec.org/p/mtu/wpaper/20_14.html
   My bibliography  Save this paper

A Growing Problem: Exploring Livestock Farm Resilience to Droughts in Unit Record Data

Author

Listed:
  • Levente Timar

    () (Motu Economic and Public Policy Research)

  • Eyal Apatov

    () (Oranga Tamariki, Ministry for Children)

Abstract

Climate models indicate that New Zealand’s farms will be increasingly exposed to adverse climate events in the future. In this study, we empirically investigate drought impacts on farm enterprises by linking financial, agricultural and productivity data from Statistics New Zealand’s Longitudinal Business Database (LBD) with historical weather data from NIWA. Our sample consists of an unbalanced panel of over 67,000 observations of livestock farm enterprises between 2002 and 2012. We run a set of panel regressions with time and farm fixed effects to estimate the effect of changes in drought intensity on gross output, profit per hectare, current loans and intermediate expenditure of dairy and sheep-beef farms. To explore factors of resilience to droughts, we also examine how the estimates change with different farm characteristics. Most (but not all) of the estimated drought effects are significant, consistent across various specifications and of the expected sign. However, we have limited success in conclusively identifying farm characteristics that affect drought outcomes in our data.

Suggested Citation

  • Levente Timar & Eyal Apatov, 2020. "A Growing Problem: Exploring Livestock Farm Resilience to Droughts in Unit Record Data," Working Papers 20_14, Motu Economic and Public Policy Research.
  • Handle: RePEc:mtu:wpaper:20_14
    as

    Download full text from publisher

    File URL: http://motu-www.motu.org.nz/wpapers/20_14.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Peck, Dannele E. & Adams, Richard M., 2010. "Farm-level impacts of prolonged drought: is a multiyear event more than the sum of its parts?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 1-18.
    2. Richard Fabling, 2009. "A Rough Guide to New Zealand's Longitudinal Business Database," Global COE Hi-Stat Discussion Paper Series gd09-103, Institute of Economic Research, Hitotsubashi University.
    3. Richard Fabling, 2011. "Keeping it Together: Tracking Firms on New Zealand’s Longitudinal Business Database," Working Papers 11_01, Motu Economic and Public Policy Research.
    4. Arthur Grimes & Andrew Aitken, 2008. "Water, Water Somewhere: The Value of Water in a Drought-Prone Farming Region," Working Papers 08_10, Motu Economic and Public Policy Research.
    5. Lawes, R.A. & Kingwell, R.S., 2012. "A longitudinal examination of business performance indicators for drought-affected farms," Agricultural Systems, Elsevier, vol. 106(1), pages 94-101.
    6. Dannele E. Peck & Richard M. Adams, 2010. "Farm-level impacts of prolonged drought: is a multiyear event more than the sum of its parts?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 43-60, January.
    7. Yusuke Kuwayama & Alexandra Thompson & Richard Bernknopf & Benjamin Zaitchik & Peter Vail, 2019. "Estimating the Impact of Drought on Agriculture Using the U.S. Drought Monitor," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(1), pages 193-210.
    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. Farnaz Pourzand & Ilan Noy & Yiğit Sağlam, 2020. "Droughts and farms’ financial performance: a farm‐level study in New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), pages 818-844, July.
    2. Farnaz Pourzand & Ilan Noy & Yigit Saglam, 2019. "Droughts and farms' financial performance in New Zealand: a micro farm-level study," CESifo Working Paper Series 7633, CESifo.
    3. Pourzand, Farnaz & Noy, Ilan & Sağlam, Yiğit, 2019. "Droughts and farms’ financial performance in New Zealand: A micro farm level study," Working Paper Series 8159, Victoria University of Wellington, School of Economics and Finance.
    4. Richard Fabling & David C Maré, 2015. "Production function estimation using New Zealand’s Longitudinal Business Database," Working Papers 15_15, Motu Economic and Public Policy Research.
    5. Peck, Dannele E. & Adams, Richard M., 2011. "A reply to ‘Multiyear versus single-year drought: a comment on Peck and Adams’," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), pages 1-4, September.
    6. Ancev, Tihomir, 2011. "Multiyear versus single-year drought: a comment on Peck and Adams," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(3), pages 1-3, September.
    7. Bastian, Christopher T. & Gray, Stephen T. & Peck, Dannele E. & Ritten, John P. & Hansen, Kristiana M. & Krall, James M. & Paisley, Steven I., 2011. "The Nature of Climate Science for the Rocky Mountain West: Implications for Economists Trying to Help Agriculture Adapt," Western Economics Forum, Western Agricultural Economics Association, vol. 10(2), pages 1-10.
    8. Fabling, Richard & Sanderson, Lynda, 2013. "Exporting and firm performance: Market entry, investment and expansion," Journal of International Economics, Elsevier, vol. 89(2), pages 422-431.
    9. Richard Fabling & David C. Maré, 2016. "Firm-Level Hiring Difficulties: Persistence, Business Cycle And Local Labour Market Influences," Journal of Labor Research, Springer, vol. 37(2), pages 179-210, June.
    10. Nathan Chappell & Adam Jaffe, 2018. "Intangible Investment and Firm Performance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 52(4), pages 509-559, June.
    11. Richard Fabling & Lynda Sanderson, 2014. "Foreign acquisition and the performance of New Zealand firms," New Zealand Economic Papers, Taylor & Francis Journals, vol. 48(1), pages 1-20, April.
    12. Lynda Sanderson, 2013. "Sources of international investment data in the Longitudinal Business Database," Working Papers 13_15, Motu Economic and Public Policy Research.
    13. Richard Fabling & Arthur Grimes & Levente Timar, 2014. "Natural Selection: Firm Performance Following the Canterbury Earthquakes," Working Papers 14_08, Motu Economic and Public Policy Research.
    14. Richard Fabling & Lynda Sanderson, 2016. "A Rough Guide to New Zealand's Longitudinal Business Database (2nd edition)," Working Papers 16_03, Motu Economic and Public Policy Research.
    15. Richard Fabling & Arthur Grimes & David C. Maré, 2012. "Performance Pay Systems and the Gender Wage Gap," Working Papers 12_13, Motu Economic and Public Policy Research.
    16. Richard Fabling & David C Maré, 2015. "Addressing the absence of hours information in linked employer-employee data," Working Papers 15_17, Motu Economic and Public Policy Research.
    17. Richard Fabling & Arthur Grimes, 2019. "Ultra-fast broadband, skill complementarities, gender and wages," Working Papers 19_23, Motu Economic and Public Policy Research.
    18. Kang, Hyunwoo & Sridhar, Venkataramana & Mills, Bradford F. & Hession, W. Cully & Ogejo, Jactone A., 2019. "Economy-wide climate change impacts on green water droughts based on the hydrologic simulations," Agricultural Systems, Elsevier, vol. 171(C), pages 76-88.
    19. Birthal, Pratap S. & Negi, Digvijay S. & Khan, Md. Tajuddin & Agarwal, Shaily, 2015. "Is Indian agriculture becoming resilient to droughts? Evidence from rice production systems," Food Policy, Elsevier, vol. 56(C), pages 1-12.
    20. Gil, Marina & Garrido, Alberto & Gómez-Ramos, Almudena, 2011. "Economic analysis of drought risk: An application for irrigated agriculture in Spain," Agricultural Water Management, Elsevier, vol. 98(5), pages 823-833, March.

    More about this item

    Keywords

    Drought; farm enterprise; resilience; panel data; fixed effects;
    All these keywords.

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

    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:mtu:wpaper:20_14. 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: (Maxine Watene). General contact details of provider: https://edirc.repec.org/data/motuenz.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.